December brought a big surprise in the job market, with a whopping 256, 000 new jobs added. This was way more than the expected 155, 000, and it even surpassed November's 212, 000 new jobs. The unemployment rate also dropped slightly to 4. 1%. Even a broader measure, including those who are discouraged or working part-time for economic reasons, hit a low not seen since June 2024.

You might think this would excite the stock market, but nope! Stock futures fell, and Treasury yields rose because traders now think the Federal Reserve has less reason to lower interest rates this year. Dan North, a senior economist, said this job surge makes the Fed's job easier. Why? Because inflation hasn't budged in months, so there's no need to cut rates to boost the economy.

Despite some bumps earlier in the year, the job market ended on a strong note. The average workweek stayed steady at 34. 3 hours, and wage growth was just a bit less than expected. In the past year, wages rose by 3. 9%, showing that wage inflation is slowing down. So, the labor market might not be causing the inflation the Fed is worried about.

This job report wraps up a year where jobs grew every month, even though the pace wasn't always consistent. As we look ahead, the Fed will have to decide what's next for interest rates with this strong job growth in mind.

Job Surprise: December 2024 Sees Surge in Hiring

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