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

The Department of Labor reported on Friday that employers Added 256,000 jobs. In December, well above LSEG economists’ estimates.

gave Unemployment rate It came in at 4.1 percent, slightly below economists’ expectations.

Both the number of jobs added in the previous two months were revised upward, with job creation increasing by 7,000 in October to 43,000 from 36,000. While November’s increase of 227,000 was reduced by 15,000 to 212,000. Taken together, those two months produced 8,000 fewer jobs than previously reported.

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

Wage growth was largely in line with expectations, with average earnings rising 0.3% on a monthly basis and 3.9% from a year earlier.

gave Manufacturing sector December saw a decline of 13,000 jobs, a surprise drop when economists had forecast a gain of 5,000 jobs.

Health care 46,100 jobs were added in December, with gains focused on home health care services (+15,200), nursing and residential care facilities (+14,000) and hospitals (+11,500). Health care added an average of 57,000 jobs per month in 2024, which was the same as the monthly average in 2023.

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The manufacturing sector lost 13,000 jobs in December. (Reuters/Rebecca Cook/Reuters Photo)

gave Retail sector After 29,000 jobs were lost in November, there was an increase of 43,400 in December. Last month’s gains were concentrated in clothing, shoe and jewelry retailers (+22,600), general merchandise (+12,700) and health and personal care (+7,000). Retail jobs were lost in building materials and garden equipment (-11,400).

Leisure and hospitality also added 43,000 jobs, up from an average of 24,000 a month in 2024.

The government added 33,000 jobs in December, slightly below the 2024 monthly average of 37,000 jobs. Government employment last year saw slower growth than in 2023, when it averaged 59,000 jobs per month.

Social assistance employment increased by 23,400 last month, most of which was in individual and family services (+17,000). The sector added an average of 18,000 jobs per month in 2024, down slightly from an average of 23,000 in 2023.

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The labor force participation rate was unchanged at 62.5%, unchanged from a month ago, and has ranged from 62.5% to 62.7% since December 2023.

The number of people considered long-term unemployed, defined as being unemployed for 27 weeks or more, was little changed at 1.6 million in December but up 278,000 from a year earlier. is more The long-term unemployed accounted for 22.4 percent of all unemployed people last month.

Federal Reserve Chair Jerome Powell indicated that the Fed could slow the pace of interest rate changes in response to labor market conditions and inflation data. (Seth Harold/Bloomberg via Getty Images/Getty Images)

The December jobs report comes as the Federal Reserve is scheduled to hold its next meeting in late January to discuss a possible rate cut. Fed Chair Jerome Powell A recent 25-basis-point cut in December signaled that policymakers may slow the pace of rate changes based on upcoming labor market and inflation data.

“A surprisingly strong jobs report certainly won’t make the Fed downgrade,” said Alan Zentner, chief economic strategist at Morgan Stanley Wealth Management. “All eyes will now turn to next week’s inflation data, but even a negative surprise in those data probably won’t be enough to get the Fed to cut rates anytime soon.”

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Market expectations that the Fed will Keep rates stable Its January meeting was bolstered by the December jobs report. The probability that the Fed will keep its target for benchmark federal funds in a range of 4.25% to 4.5% rose to 97.3% on Friday, from 93.6% a day earlier.

“Today’s report serves as further evidence that the labor market is stable, providing more cover for the Federal Reserve to exercise caution on the path to easing rates, as well as job seekers from some sectors. Most are looking for signs of a boom in employment,” said Corey Kantenga, head of economics at LinkedIn.