December 2024 is expected to report a slow US job market, with nonfarm payrolls, or all employees that could impact Federal Reserve interest rate, likely increasing only 160,000 compared to November's 227,000.
Along with this, the unemployment rate is projected to hold steady at 4.2%, still an indication of a healthy labor market. Another thing that will remain steady is hiring, as it has remained the base supporting moderate consumer spending, although President-elect Donald Trump's immigration policy shifts could slow this down.
In a report by Reuters, average hourly earnings are forecasted to advance 0.3% in December and raise the year-over-year increase to 4.0%. This wage growth has helped fuel consumer spending and strengthen the economy. The job market, while at a historical low for layoffs, has underpinned the resilience, with some sectors still slowed by the rate hikes that began in 2022 and accelerated in 2023 by the Federal Reserve.
Although hiring has remained positive, there is some uncertainty with regards to the administration's future tariff and immigration policies. The Fed has been rather cautious, only predicting two quarter-point rate cuts in 2025, after trying to weigh concerns over labor markets against keeping inflation under control.
Industries Hiring in US Job Market
No significant hiring boost is expected post-election, with job gains likely to be concentrated in stable sectors like healthcare and government, although the same positive data were not present in retail and tech. Business sentiment has improved, regardless, but no major plans to increase workforce headcount have been observed in surveys.
The unrounded unemployment rate recorded by Forexlive showed that it has slightly increased, which Trump should be concerned about as it will affect future labor market conditions. Economists warn this trend could impact the Fed's approach to rate cuts. Any rise in unemployment could shift the central bank's priorities in 2025.
While the labor market is still going strong, there are some challenges like permanent job losses increasing and unemployment durations that may be lengthening. Steady job growth and wage increases are helping the US economy end the year on stable footing for now.
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