US non-farm payrolls beat forecasts in December, rise by 256,000
By Alexander Bueso
Date: Friday 10 Jan 2025
(Sharecast News) - Hiring in the US picked up modestly at the end of 2024, but nevertheless came in well ahead of forecasts.
According to the Department of Labor, in seasonally adjusted terms non-farm payrolls jumped by 256,000 in December.
That compared to a consensus forecast for 165,000.
Readings for the previous two months combined were marked down by a combined 8,000.
Average hourly earnings increased at a pace of 0.3% month-on-month, as expected, but the rate of unemployment ticked lower by a tenth of a percentage point to 4.1%.
Services accounted for the bulk of hiring last month, with companies in the sector taking on 231,000 new hires, after a gain of 148,000 in November.
Goods-producing companies on the other hand shed 8,000 workers, while the public sector added 33,000.
The labour force participation rate was steady at 62.5%.
In an immediate reaction, cable fell to 1.2193 and the interest rate sensitive yield on the 2 year US Treasury note jumped by 10 basis points to 4.394%.
Fed funds futures meanwhile were left pricing in a probability of just 71.6% of one more 25 basis point reduction in rates by the end of 2025 and not sooner than September.
Commenting after the latest data, Thomas Ryan at Capital Economics noted how the year-on-year rate of increase in earnings growth had dipped from 4.0% in November to 3.9%.
That, he said, would reassure the Fed after the high level of services inflation and the increase in the ISM services prices paid index seen during just the last week.
"Nevertheless, the odds have increased that the Fed is close to being finished with its loosening cycle, particularly if the incoming Trump administration pushes ahead with a stagflationary mix of tariffs and immigration curbs."
-- More to follow --
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