The US economy added 256,000 jobs in December, more than expected

The U.S. economy added more jobs than expected in December as Federal Reserve policymakers closely monitor the strength of the labor market ahead of their meeting later this month.

The Labor Department reported on Friday that employers added 256,000 jobs in December, beating LSEG economists’ estimates.

The unemployment rate came in at 4.1%, slightly below economists’ estimates.

The number of jobs added in the past two months both improved, with job creation rising by 7,000 in October from 36,000 to 43,000. November’s gain improved by 15,000 from 227,000 to 212,000. These two months combined, 8,000 fewer jobs were created.

Private sector payrolls added 223,000 jobs in December, well above the 135,000 forecast by LSEG economists.

The manufacturing sector reported employment fell by 13,000 in December, a sharp decline when economists had expected a gain of 5,000 jobs.

Wage growth was largely in line with expectations, with average earnings up 0.3% month-over-month and up 3.9% from a year ago.

Health care added 46,000 jobs in December focused on home health care services (+15,000), nursing and residential care facilities (+14,000) and hospitals (+12,000). Health care added an average of 57,000 jobs per month in 2024, the same as the monthly average in 2023.

The retail sector added 43,000 after losing 29,000 jobs in November. Last month’s gains were concentrated in apparel, footwear and jewelry retailers (+23,000), general merchandise (+13,000) and health and personal care (+7,000). Retail jobs in construction materials and gardening (-11,000) were lost.

The government added 33,000 jobs in December, slightly below the 2024 monthly average of 37,000 jobs. Growth in government jobs was slower than in 2023, when the monthly average gain was 59,000 jobs.

Social assistance employment increased by 23,000 last month, most of which were in personal and family services (+17,000). The sector added an average of 18,000 jobs per month in 2024, down slightly from the 23,000 average in 2023.

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