US economy cranks out jobs at brisk clip: Report

Hiring forecasts: The US employers exceeded hiring forecasts and demonstrated wage increases in December, challenging market projections of an imminent Federal Reserve interest rate cut in March, as per the Labour Department's influential employment report.

Despite the positive momentum, the report revealed some concerning elements. Revised data indicated that 71,000 fewer jobs were added in October and November. Although the unemployment rate held steady at 3.7 per cent, it was due to 6,76,000 individuals exiting the workforce, nearly offsetting participation gains since February. Household employment witnessed a notable decline, and the average workweek slightly decreased compared to November.

Labour market's resilience

The report suggested that the economy evaded a recession in the previous year and is poised for growth throughout 2024, supported by the labor market's resilience, which in turn bolsters consumer spending.

Scott Anderson, BMO Capital Markets' chief US economist in San Francisco, highlighted that a gradual labour market cooldown remains in place. "However, the enduring resilience of the labour market and robust wage growth might delay the Fed's actions longer than current market expectations," he added.

The Bureau of Labour Statistics reported an increase of 2,16,000 nonfarm payrolls last month, surpassing Reuters' economists' predictions of a 1,70,000 job rise. Although there was a notable increase of 2.7 million jobs in 2023, it marked a decline from the 4.8 million positions generated in 2022.

(with Reuters inputs)