Jobs Report Signals Ongoing Labor Market Strength Despite Rate Hikes
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The US economy added 216,000 jobs in December, exceeding expectations of 160,000 jobs. This signals the labor market remains strong despite high interest rates.
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Wage growth picked up slightly in December, with average hourly earnings rising 4.1% annually. This could add to inflationary pressures.
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The labor force participation rate dropped to 62.5% in December, indicating the pool of available workers is shrinking. This could put upward pressure on wages.
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Job gains were widespread across industries like leisure/hospitality, health care, construction, and manufacturing. The unemployment rate held steady at 3.5%.
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The strong jobs data dampened hopes for imminent interest rate cuts from the Fed. Markets now see just a 50% chance of a rate cut in March, down from 75% before the report.