United States: Employment Ends 2024 with a Bang

Employment gains for the last two months of 2024—212,000 for November (revised from 227,000) and 256,000 in December—were a happy ending to an otherwise volatile year. In 2024, the United States faced labour disputes, devastating storms, high key interest rates (though rate cuts began in September) and global uncertainty. But the labour market seems to have weathered the storm—at least according to the establishment survey. While its performance wasn’t quite as strong as it was in previous years, the job market did hold up quite well overall. Wages also continued to grow steadily, rising 4.0% year over year. The US job market made it through 2024 relatively unscathed. It now remains to be seen how it will react to what 2025 has in store.

The latest numbers suggest that we’re starting the year on solid ground. December’s monthly gain of 256,000 was the strongest report since March. However, the gains were more concentrated than they were in November. At that time, 59.0% of the 250 sectors surveyed reported a monthly increase in their workforce: in December, that percentage dropped to 56.4%. Last month’s gains mainly came from services, while jobs were lost in manufacturing. Private services created 231,000 jobs in December, its best performance since May 2023. The 43,400 jobs added in retail trade are a particularly noteworthy result. For the first time since winter 2022, temporary help services added jobs for two months in a row. This sector has struggled over the last few years.

Even the household survey performed well in December. Job creation was 478,000, the highest of the year. That said, the two surveys diverged significantly for 2024 as a whole. While the establishment survey reported over 2,000,000 jobs created, the household survey posted gains of just 537,000. We still believe that the household survey’s results must be taken with a grain of salt as they are highly volatile. The data for both surveys will be revised in February; we’ll see then if this gap is narrowed.

Job creation ended 2024 with a strong showing, and the results for the year as a whole are relatively solid. 2025 might be a more difficult year, especially if a new trade war erupts. As in 2024, severe weather and natural disasters could also lead to volatility, as we’re reminded by the fires in Los Angeles. Given that the Federal Reserve is already hesitant about additional rate cuts, December’s healthy labour market may seem like an additional argument for holding off on further monetary easing at the January 29 meeting.