U.S. Employment increases by 256,000 jobs in December
KEY TAKEAWAY: According to the most recent report from the Bureau of Labor Statistics (BLS), employment in the U.S. increased by 256,000 in December 2024. This growth was enhanced by the recovery after Hurricanes Helene and Milton in the Southeast. The unemployment rate slid to 4.1%.
Employment
In Brief: In November, the Trade, Transportation, and Utilities sector experienced the largest payroll losses, totaling -23,000 jobs. This decline was likely another residual effect of the hurricanes that occurred during the survey period from October 13th – November 12th. As a result, a strong recovery performance was expected in December. However, job gains exceeded expectations, surging ahead with an increase of 49,000 jobs in this sector during the month.
The Big Picture: Private Education & Health Services and the Public sectors in December maintained the high growth we have seen over the last year. While Education & Health Services look to remain the primary job generators in the labor market heading into next year, the Public sector may see some diminishment at the Federal level with the incoming administration’s call to cut discretionary spending.
Unemployment
In Brief: The U-6 unemployment rate, which includes discouraged, underemployed, and unemployed workers in the country, fell to 7.5% in December. The U-3 unemployment rate, which indicates only the number of unemployed people actively seeking a job, declined to 4.1%.
What Does This Mean?: The U-6 unemployment rate declined more than the U-3 rate. Since the labor force participation rate remained unchanged, it indicates that more individuals who were underemployed were able to find jobs with the number of work hours that they wanted in December.
The employment numbers above reflect the seasonally adjusted, monthly change in non-farm jobs.
The unemployment rate measures the percentage of the labor force that is currently without a job. The national unemployment rate has remained steady throughout 2023 and now into 2024, fluctuating between 3.7% and 4.1%.
U-3 unemployment rate is the most commonly reported rate in the United States, representing the number of unemployed people actively seeking a job. The U-6 rate covers discouraged, underemployed, and unemployed workers in the country.
The labor force participation rate is an estimate of an economy’s active workforce. YTD the U.S. labor force participation rate ranged between a low of 62.5% and a high of 62.8%, according to the U.S. Bureau of Labor Statistics.
How We Matched Up
Geographic Solutions: Geographic Solutions' expectation of 177,000 jobs was short of the 256,000 jobs added in December. The unemployment rate expectation of 4.3% was above the result.
The Wall Street Journal: The Wall Street Journal's expectation of 155,000 jobs being added to the labor market was below what was recorded in the labor market report. The unemployment rate forecast of 4.2% was slightly above the result.
ADP: According to ADP’s latest estimate, the private sector added 122,000 jobs in December, compared to the 223,000 reported by the BLS.
Key Takeaway: In November, the Private Education & Health Services added the highest number of jobs, totaling 80,000, which is fairly consistent with its average job growth of 74,000 over the previous 12 months. However, the sectors that showed the most notable improvements compared to their recent histories were Trade, Transportation, & Utilities, which saw an increase of 49,000 jobs in December compared to an average of just 15,000 over the past year. Similarly, the Leisure & Hospitality sector grew by 43,000 jobs this past month compared to an average of 20,000 over the same period.
Here’s Why: Employment in Social Assistance services increased sharply in December. Clothing, clothing accessories, shoe, and jewelry retailers boosted Trade, Transportation, & Utilities. The gains in this retail sector suggest that the holiday hiring season was unusually active. Next month the BLS is revising its seasonal adjustment factors in this survey which may significantly alter the month-to-month job changes of seasonal industries such as retail.
Stock Down: Manufacturing
Key Takeaway: The Manufacturing Sector was down this past month with 13,000 jobs lost. No other sectors suffered significant job loss.
Here’s Why: Job declines within the sector were most severe in Computer and electronic product manufacturing (-6,000). This is a part of a longer trend. Manufacturing employment has been stagnant since October 2022. The computer sub sector was also moving sideways with the larger industry but entered into a definitive downward direction at the beginning of the last year.
Will job creation remain robust over the coming months?
Based on the numbers from the latest report, we anticipate employment growth will slow down but will continue to add jobs at a slower pace in the coming months. This indicates that businesses are still looking to expand but more gradually.
Do workers or employers have more power in the labor market?
Neither side has a definitive upper hand, but it appears that the decline in unfilled job openings is giving employers more influence in the job market.
How has the labor market shifted since March 2023?
The labor market has continued to add jobs without slowing down despite widespread expectations of a recession.
Geographic Solutions derives its employment forecast and unemployment rate forecast from internal data on the number of job openings, searchers, and employment and unemployment applications filed on Geographic Solutions' state client sites. The forecast uses unemployment claims data from the U.S. Department of Labor (USDOL).
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