The U.S. added 216,000 jobs and the unemployment rate held steady at 3.7 percent in December, according to data released Friday by the Bureau of Labor Statistics, closing the books on a year of remarkable economic resilience.
The jobs report bookends a surprisingly strong year that largely defied earlier fears that interest rate hikes intended to bring down inflation would trigger a recession and drive more people out of work.
The December jobs gain beat expectations from economists, who projected the U.S. to add roughly 170,000 jobs last month, according to consensus estimates.
December also extended the longest stretch the unemployment rate has been below 4 percent since the mid-1960s.
Private sector earnings were also up 0.4 percent, according to the report. The average hourly wage has increased 4.1 percent over the past year, outstripping inflation, which clocked in at 3.1 percent in November.
Even so, there were significant downward revisions of past jobs gains. November’s initially reported gain of 150,000 was revised down to 105,000, and an October gain of 199,000 jobs was revised down to 173,000.
“Overall, solid headline numbers, but some of the dynamics under the hood are more worrying,” Martha Gimbel, a research scholar at Yale Law School who recently left the White House Council of Economic Advisers, wrote on X, the platform formerly known as Twitter. She pointed to the downward revisions as part of this.
The first jobs report of 2024 comes as President Biden attempts to sway public opinion on the economy with less than a year to make this pitch for another term. Despite the strength of the labor market, Biden has struggled to sell voters on the his handling of the economy after two years of high inflation.
But the Biden camp will no doubt be pleased with the continued resiliency of the labor market in the face of high interest rates.
“With a total of 2.7 million new jobs created, 2023 was a year that beat economic expectations by every metric,” House Budget Committee ranking member Brendan Boyle (D-Pa.) said.
“Wages and consumer confidence are up, the economy is growing, and in 2024, President Biden and Democrats will keep working to lower costs and get working families more breathing room.”
While the latest jobs numbers could help boost President Biden’s economic pitch as he heads into the 2024 reelection, they may give the Federal Reserve pause as it considers when and how to cut interest rates.
“Coming off an extremely strong 2022, last year’s labor market was very solid overall with continued employment advances across the board. The strength of the labor market has helped stave off the recession that was anticipated by most economists. Because of today’s strong jobs number, the Fed cut in March now seems less likely,” said Eric Merlis, managing director and co-head of global markets at Citizens.
Updated at 9:03 a.m. ET