Title: Anticipating the Final Jobs Report for 2024: A Breakdown
Title: Anticipating the Final Jobs Report for 2024: A Breakdown
Through November, the United States saw approximately 180,000 jobs added per month. Despite this, the unemployment rate saw a slight uptick, remaining close to record-breaking lows.
This set of figures offered some comfort, leading many to believe that the resilient and expanding U.S. economy was gradually heading towards that elusive "soft landing," where inflation could be reined in without causing a recession.
On Friday, we can expect more clarity on how this played out in December, as the Bureau of Labor Statistics releases the final jobs report for 2024 at 8:30 a.m. E.T.
Economists anticipate that job growth in December was steady but relatively subdued, with an estimated 153,000 new positions and the unemployment rate holding steady at 4.2%.
Nela Richardson, chief economist at payroll company ADP, commented on the year's job market as "very stable, a labor market where supply and demand were in balance for the first time, post-pandemic."
However, 2025 might introduce unprecedented volatility. "I don’t think we’ll stay stable," Richardson noted. "Economies are known to change very quickly."
In the late stages of 2024, churn in the labor market began to experience a slowdown and hesitation. Hiring declined to decadal lows, workers remained in their positions for longer periods, and job searches took longer than usual.
Cory Stahle, economist at the Indeed Hiring Lab, explained, "This is still a pretty healthy labor market; it’s also pretty bifurcated. Your experience with the labor market is going to depend largely on what industry or occupation you’re working in."
Multiple factors contributed to this slowdown. These included post-pandemic adjustments, concentration in specific job sectors, high interest rates, technological changes, and uncertainties surrounding economic predictions and future governmental policies.
Predicting the labor market evolution in 2025 has proved challenging, with many questioning potential implications of incoming policies, such as tariffs, mass deportations, and heavy government cuts.
Some industries have been preserving their jobs gains, bolstering the economy during 2024. From January to November, private healthcare and social assistance accounted for a vast 75% of overall job gains, with healthcare contributing 41%, government services contributing 21%, and leisure and hospitality 13%.
Stahle and Indeed Hiring Lab economists reviewed that data and expressed concern about this tri-industry concentration and its potential consequences if these sectors falter further in 2025.
However, there's optimism for a rebound in labor market growth this year. Julia Pollak, chief economist at ZipRecruiter, pointed to increased employment openings and interpretations of a more favorable economic environment caused by rate cuts and loosening regulations in the financial sector.
While the labor market exhibited stable activity, private sector hiring shrank slightly in December, as reported by payroll processor ADP. The report highlighted a decrease in hiring (dropped to an estimated 122,000 jobs), as well as a slowdown in wages. Although the overall labor market isn't deteriorating, the pace of job growth has slowed dramatically compared to the substantial employment gains during the recovery stage.
Despite this, the latest turnover data demonstrated a decline in quit levels and ongoing low layoff activity, signifying the labor market's enduring stability.
The resilient U.S. economy, with its steady job growth, has been beneficial for various businesses, as evidenced by the steady increase in jobs over several months. However, the focus in economic discussions has shifted towards maintaining this growth without causing inflation or a potential recession.