Job openings surged to a six-month high in November, exceeding 8 million, while layoffs remained largely unchanged. The labor market displayed mixed signals as the quits rate, an indicator of worker mobility, declined. Economists anticipate the Bureau of Labor Statistics to announce a gain of 155,000 nonfarm payrolls for December, a noticeable decrease from November's unexpected increase of 227,000. The December report may present challenges in interpretation due to the seasonal hiring of holiday workers.
Economists agree that December's expected payroll growth aligns with the four-month average. However, Goldman Sachs predicts a more modest increase of just 125,000 jobs. The unemployment rate is expected to remain steady at 4.2%, with average hourly earnings forecasted to rise by 0.3% in December, reflecting an annual increase of 4% compared to the previous year.
The Federal Reserve's December meeting highlighted a "gradual easing" in labor market conditions but noted "no signs of rapid deterioration." LaSalle Network's survey revealed that 67% of small and midsize companies plan to boost headcount in 2025, a slight decline from 74% the previous year. The economy in 2024 added approximately 180,000 jobs monthly up until November.
"We've seen a little bit of the softening, and I think we'll continue to see that, but it's still a good labor market overall." – Maureen Hoersten, chief operating officer and interim CEO at LaSalle Network
Job openings in November suggest a resilient labor market despite the slight softening. The layoffs remaining steady provide further evidence of stability. While the quits rate dropped, indicating less movement among workers, it does not necessarily signal weakness. Instead, it may reflect cautiousness as workers evaluate their career prospects amid changing economic and political climates.
"Things are leveling off a little bit. People are still a tad cautious, trying to figure out this new year and the new economic climate and political climate." – Maureen Hoersten, chief operating officer and interim CEO at LaSalle Network
The expected gain in December's nonfarm payrolls signifies a return to steadier growth after November's surprising spike. With seasonal factors from holiday hiring complicating the interpretation of this data, analysts remain focused on long-term trends rather than short-term fluctuations. The average monthly job addition of 180,000 for most of 2024 underscores a consistent expansion in employment opportunities.
"Right now, I think things are just going to stay fairly flat overall, nothing drastic one way or the other." – Maureen Hoersten, chief operating officer and interim CEO at LaSalle Network
Goldman Sachs' projection of 125,000 job gains for December suggests a cautious outlook on employment growth prospects. This forecast underscores their view of rebounding labor force participation rates amid challenges in job finding.
"Our forecast reflects a rebound in the labor force participation rate and middling household employment growth amid more challenging job-finding prospects." – Goldman Sachs
The Federal Reserve's observations during their December meeting bolster confidence in the labor market's resilience. They view the current easing in conditions as gradual without signs of rapid decline. This aligns with sentiment from business leaders who believe that while the market may experience slight fluctuations, it remains fundamentally strong.
"But I do believe it's still a good, strong market, and companies just needed to get past the little bit of a crazy climate over the past couple months and get back to the steady state." – Maureen Hoersten, chief operating officer and interim CEO at LaSalle Network