December jobs report shows unemployment fell to 4.1%, 256,000 jobs added to finish 2024 on high note
Published On Jan 10, 2025, 9:08 AM
The latest jobs report reveals a stronger-than-expected US labor market, with 256,000 jobs added in December and unemployment dropping to 4.1%. This exceeded economists' predictions of 165,000 jobs and marks the highest monthly job growth since March 2023. Wage growth is steady but slightly down from the previous month, adding pressure to inflation metrics. Following the report, investor expectations shifted regarding the Federal Reserve's timeline for reducing interest rates, with less likelihood of cuts in the near term. Consequently, stock futures dipped almost 1% in response to the news as Treasury yields rose.
Stock Forecasts
SPY
Negative
Given the strong job growth and declining unemployment, the Federal Reserve is likely to maintain interest rates longer than previously anticipated. This can negatively affect stock valuations in the short term as investor sentiment reacts to the rising interest rate environment. Additionally, sustained wage growth may further fuel inflation concerns, complicating any potential future cuts to rates.
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