The December jobs report is expected to offer limited clarity on the direction of the labor market, as experts have varying opinions on the extent of the slowdown in hiring. Economists anticipate that the Bureau of Labor Statistics will announce a gain of 155,000 in nonfarm payrolls, a decrease from the surprising 227,000 increase in November but consistent with the four-month average. The unemployment rate is projected to remain at 4.2%.
The specifics of the report will be crucial, as some analysts on Wall Street suggest that the numbers could be weaker depending on seasonal patterns and other factors. Maureen Hoersten, the chief operating officer and interim CEO at LaSalle Network, mentioned that there has been a slight softening in the labor market, but overall it remains strong. She noted that people are still cautious due to uncertainties in the new year’s economic and political climate.
In 2024, the economy added an average of about 180,000 jobs per month until November, although recent data has been erratic and somewhat perplexing. Federal Reserve Governor Michelle Bowman stated that interpreting labor market reports has become increasingly challenging due to measurement issues, such as a surge in new workers and low survey response rates.
The December report may be difficult to assess based on the impact of holiday hiring on the figures. Goldman Sachs predicts a payroll growth of 125,000 and an increase in the unemployment rate to 4.3%. Citigroup forecasts 120,000 new jobs and a 4.4% unemployment rate, indicating a softening labor market.
Despite the current uncertainties, Hoersten believes that companies will continue to hire gradually once volatile factors stabilize. A recent Bureau of Labor Statistics report showed a six-month high in job openings in November, with layoffs remaining stable and a decline in the quits rate.
At the Federal Reserve’s December meeting, officials observed a gradual easing in labor market conditions but did not see signs of rapid deterioration. A survey by LaSalle Network revealed that 67% of small and midsize companies plan to increase headcount in 2025, with expectations of smaller salary increases and continued hybrid working arrangements to attract workers.
Average hourly earnings are anticipated to rise by 0.3% in December, with an annual rate of 4% compared to the previous year. Hoersten believes that the market will remain relatively stable, emphasizing that it is still strong and companies need to navigate through recent uncertainties to return to a steady state.
