The December jobs report is likely to offer only limited clarity on where the labor market is headed, with experts differing on the severity of the hiring slowdown.
From a consensus perspective, economists expect the U.S. Bureau of Labor Statistics to report an increase of 155,000 nonfarm payrolls on Friday morning, a decrease from the December 12, 2019 data. A surprising 227,000 new people were added in November But it is basically consistent with the four-month average. The unemployment rate is expected to hold steady at 4.2%.
The details of the report will be key, however, and some Wall Street expects the number could be slightly weaker depending on the impact of seasonal trends and other factors.
“We’ve seen some softening, and I think we’re going to continue to see that, but overall the (labor) market is still good,” said Maureen Hoersten, chief operating officer and interim CEO of LaSalle Network in Chicago. Talent dispatch company. “Things are leveling off. People are still a little cautious, trying to figure out the new year and the new economic climate and political climate,” she said.
On average, the economy was adding about 180,000 jobs per month in 2024 through November, although recent data has been volatile and somewhat confusing. Federal Reserve Governor Michelle Bowman complained on Thursday that labor market reports are “becoming increasingly difficult to interpret” due to measurement challenges, including a surge in new workers and low survey response rates.
The December report may also be harder to judge, depending on how the hiring of holiday workers impacts the numbers.
Goldman Sachs estimates that employment will increase by just 125,000 and the unemployment rate will rise to 4.3%.
“Our forecasts reflect a rebound in labor force participation and middling household employment growth amid a more challenging employment outlook,” the Wall Street bank said in a note. “We expect non-retail sector, Slower employment growth in professional services and construction in particular will more than offset strong retail hiring this month.”
Similarly, Citigroup forecasts only 120,000 new jobs and an unemployment rate of 4.4%. Economist Andrew Hollenhorst wrote, “The market should be reminded that the labor market has not yet stabilized and is continuing to do so.” Weak.
However, Holsten said she believes the company will continue to add headcount, even at a gradual pace, once some of the current volatility subsides. one A report from the U.S. Bureau of Labor Statistics earlier this week The number of job openings was just over 8 million in November, a six-month high, while layoffs were little changed and the resignation rate, a measure of worker turnover, fell.
At the Fed’s December meeting, officials noted that “labor market conditions are gradually easing” but “do not see signs of a rapid deterioration.” Minutes of meeting released on Wednesday.
A recent business survey by LaSalle Network found that 67% of small and medium-sized businesses plan to increase headcount in 2025, down from 74% the previous year. The survey also found that wage increases are expected to be smaller and that hybrid work is likely to remain widespread, acting as a wedge against larger companies competing for workers.
Average hourly earnings are expected to grow 0.3% in December, an annual growth rate of 4%, little changed from November.
“Right now, I think the overall situation is going to remain pretty flat and not see any drastic changes,” Holsten said. “But I do believe this is still a good, strong market and companies just have to get over the last few months. crazy climate and return to a stable state.”
