The December Jobs Report was released today and nonfarm payrolls increased by 256,000 during the month. That’s better than experts’ 155,000 estimate, representing an increase over the 212,000 reported in November.
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Additionally, the December Jobs Report unemployment rate was 4.1%. Yet again, this is better than expectations, beating estimates by one-tenth of a percentage point. This comes alongside a 0.3% increase in hourly earnings, which matched expectations.
What This Means for the Economy
The December Jobs Report shows that the job market remains strong and inflation isn’t driving wages higher. That’s good news for the economy as it highlights inflation isn’t rising while also warding off fears of a recession.
On top of that, the latest jobs report adds to the idea that the Federal Reserve isn’t going to worry too much about interest rate cuts in 2025. A strong labor market alongside steady inflation means the central bank might not have much work to do this year.
On that topic, Morgan Stanley Wealth Management chief economic strategist Ellen Zentner told CNBC “All eyes will now turn to next week’s inflation data, but even a downside surprise in those numbers probably won’t be enough to get the Fed to cut rates any time soon.”
How Does This Affect the Stock Market?
The stock market is falling hard today in response to the December Jobs Report. Strong labor reducing the chance of interest rate cuts this year is taking a toll on stocks. Many investors have been hoping for more interest rate cuts, which would benefit stocks. With hopes for that dwindling, so does the price of stocks.
However, this isn’t all bad news. The falling price of stocks means traders could use today to acquire shares on the dip. Artificial intelligence (AI) stocks are expected to grow in 2025, making them a strong candidate to take a stake in today. Some of the most popular ones are listed below.
