Dive Insight:
Growth in employment also varied among industries — education and health services saw the largest spike, reporting 57,000 new jobs for December, while manufacturing hires shrank for the third consecutive month, the report found. Manufacturing jobs decreased by 11,000, following a decline of 26,000 jobs the previous month.
The slowdown comes as Federal Reserve officials continue to keep a careful eye on the labor market as they look to continue their fight against inflation in the new year, hoping to fulfill their dual mandate of reducing inflation to their 2% target while also achieving maximum employment.
While the labor market saw some weakness in 2024, it appeared to show more steadiness by the end of the year, with initial claims for unemployment hitting an eight-month low in the final week of December, according to data from the Labor Department.
That low reinforced the idea among economists and strategists that the Fed will slow their pace of interest rate cuts in 2025, after slashing the federal funds rate to a range between 4.25% and 4.5% last month, CFO Dive previously reported. At the December meeting, the Fed forecast they would cut rates to 3.9% by the end of this year — a half percentage point higher than what the central bank had predicted in September.
In a Thursday speech to NAIOP Massachusetts, a commercial real estate development association, Federal Reserve Bank of Boston President Susan Collins noted current macroeconomic conditions call for “a patient approach” to monetary policy in the new year.
While the economy is in a “good place” overall, “economic uncertainty is high, and additional information — about developments in inflation and the labor market, about possible fiscal and trade policy changes, and more — will be key to determining the appropriate course for monetary policy in the year ahead,” Collins said.
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