Published January 11, 2024 6:20 am est
by Richard F. Cason,
Editor,
NEWSMOVESMARKETSFOREX ®
KEY TAKE AWAYS:
- U.S. Jobs report rose by 256,000 new jobs added to the U.S. Labor Markets for the month of December
- December 2024 Labor participation still remains flat and unchanged at 62.5 percent
- In the Currency Markets U.S. dollar gained significant strength against a basket of major currencies across the board, particularly the USD/CAD, EUR/USD, and USD/JPY
- Unemployment rate holds steady at 4.1% a slight .1% decrease from the previous months report
- December Joblessness numbers for Blacks edged down by .3% to 6.1%, while Hispanics unemployment rate drastically increased by 1.3% to 5.1 percent respectively
- Positive November 2024 Job Gains in construction and health care, Leisure and Hospitality, Food services sectors, Government Jobs
December US Jobs Report Strong Growth Signals for the Economy
As 2024 comes to a close, the U.S. job market has wrapped up the year with a significant boost in employment.
In December, total nonfarm payroll employment increased by 256,000, and the unemployment rate held steady at 4.1%, according to the U.S. Bureau of Labor Statistics.
This latest report reveals a mixed landscape, showcasing growth in several key sectors while also highlighting ongoing challenges.
A Closer Look at the Numbers
The December report is based on two primary surveys: the household survey, which assesses unemployment and labor force status, and the establishment survey, which focuses on employment trends by industry.
The employment increase in December marked a positive end to a year that saw an average monthly gain of 186,000 jobs.
Though this is a drop from the 251,000 average monthly gain in 2023, the upward trend is encouraging as the economy navigates through various challenges.
Breakdown of Employment Gains
Healthcare: The healthcare sector added 46,000 jobs in December, continuing its trend as a major employer.
Notable gains came from: – Home health care services: 15,000 jobs – Nursing and residential care facilities: 14,000 jobs –
Hospitals: 12,000 jobs Throughout 2024, healthcare maintained an impressive average monthly gain of **57,000 jobs**, matching the previous year’s performance.
Retail Trade: After experiencing a job loss of 29,000 in November, the retail sector bounced back with an addition of **43,000 jobs** in December.
This increase was driven by: – Clothing and accessories retailers: 23,000 jobs – General merchandise retailers: 13,000 jobs –
Health and personal care retailers: 7,000 jobs Overall, retail trade employment was relatively stable in 2024, showing little change from the previous year 3.
Government Employment
The government sector saw an uptick of 33,000 jobs in December, continuing a trend of modest growth. The average gain for 2024 was 37,000 jobs per month, down from 59,000 in 2023.
Social Assistance Employment in social assistance rose by 23,000, primarily in individual and family services, contributing to the sector’s average monthly gain of 18,000 jobs in 2024.
Leisure and Hospitality: This sector added 43,000 jobs in December but has seen slower growth compared to 2023, averaging 24,000 jobs per month in 2024 versus 47,000 in the previous year.
Current Unemployment Trends
The unemployment rate for December remained at 4.1%, unchanged from previous months. This stability follows a period of fluctuations earlier in the year.
Currently, about 6.9 million people are unemployed, indicating that the job market is still facing challenges.
Among different demographic groups, the unemployment rates varied slightly: – Whites: 3.6% (down) – Adult men: 3.7% – Adult women: 3.8%- Teenagers: 12.4% – Blacks: 6.1%- Asians: 3.5% –
Hispanics: 5.1% Notably, the number of long-term unemployed individuals (those jobless for **27 weeks or more**) remained relatively stable at **1.6 million**, but this is an increase of **278,000** from a year earlier.
Labor Force Participation and Economic Conditions
The labor force participation rate held steady at 62.5%, remaining within a narrow range since December 2023.
The employment-population ratio, which reflects the percentage of the population that is employed, was also stable at 60.0%.
However, the number of individuals employed part-time for economic reasons (those who prefer full-time work but are unable to find it) stood at 4.4 million, showing little change from the previous year.
Additionally, there were 5.5 million people not in the labor force who wanted jobs but were not actively seeking them.
Market Reaction: Currency Movements
The release of the December jobs report had immediate effects on various currency pairs, particularly the USD/CAD, EUR/USD, and USD/JPY. USD/CAD:
The U.S. dollar gained strength against the Canadian dollar following the positive jobs report. Investors reacted to the strong employment numbers, interpreting them as a sign of economic stability and potential future interest rate hikes by the Federal Reserve.
This led to a bullish sentiment for the USD against the CAD, pushing the exchange rate higher. – EUR/USD:
Conversely, the euro faced pressure against the U.S. dollar. Market participants viewed the robust employment growth in the U.S. as a signal of economic strength, which can lead to tighter monetary policy.
As a result, the EUR/USD pair saw a decline, with traders favoring the dollar over the euro amid concerns about the European economy’s performance.
USD/JPY: The USD also appreciated against the Japanese yen. The strong employment figures contributed to a rise in U.S. Treasury yields, making dollar-denominated assets more attractive to investors.
As a result, the USD/JPY pair moved upward, reflecting increased confidence in the U.S. economic outlook compared to Japan’s ongoing challenges.
Balanced Outlook U.S. labor market continues to show resilience
As we reflect on the December jobs report, it’s clear that the U.S. labor market continues to show resilience in the face of various challenges.
The increase in nonfarm payroll employment, particularly in healthcare, retail, and government sectors, indicates a positive trend that could pave the way for a more robust job market in 2025.
However, the ongoing issues of long-term unemployment and the need for more individuals to re-enter the workforce remain pressing concerns.
As the economic landscape shifts, maintaining focus on workforce development and addressing barriers to employment will be essential for sustaining growth.
With steady job creation and a stable unemployment rate, the foundation is set for potential growth in the new year.
Employers and job seekers alike will be watching closely as we move forward into 2025, hoping for a continued upward trajectory in the job market.
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Reference: U.S. Bureau of Labor and Statistics. (2025). Employment Situation Summary Retrieved from https://www.bls.gov/news.release/empsit.nr0.
