U.S. payrolls increased by 216,000 in December, better than predicted

The U.S. labour market accumulated strong gains as the pace of hiring was greater than expected, dampening the chance of an early rate cut.

December’s jobs report showed that 216,000 jobs were added for the month while the unemployment rate remained steady at 3.7%. Estimates were in the region of 170,000 as analysts were looking for their ‘goldilocks figure.

Job boost from U.S. government

The hiring boost came from a gain of 52,000 in government jobs and another 38,000 in health care-related occupations.

Average hourly earnings rose 0.4% on the month and were up 4.1% from the same period 2023, both higher than the respective estimates for 0.3% and 3.9%.

U.S. unemployment chart Jan 2021 – December 2023

S&P500 and Nasdaq

The S&P500 and Nasdaq recovered some early 2024 losses as the fresh data encouraged the debate and chance of a rate cut again. Later however, the strong U.S. jobs growth dampened the likelihood of rate a cut anytime soon. Yields were on the rise again.

Strong streak

Government hiring drove the gains, which extended one of the strongest streaks of job creation on record. The job growth has confounded forecasters expecting job losses as higher borrowing costs slowed the economy.

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