Job growth was much stronger than expected in December, possibly providing the Federal Reserve less incentive to cut interest rates this year.
Nonfarm payrolls surged by 256,000 for the month, up from 212,000 in November and above the 155,000 forecast from the Dow Jones consensus, the Bureau of Labor Statistics reported Friday.
The unemployment rate edged down to 4.1%, one-tenth of a point below expectations.
Stock market futures were negative after the report’s release while Treasury yields soared.
The report brings to a close a year in which employment grew each month, though inconsistently and at times raising questions over whether a recession loomed. However, the final two months showed a labor market still operating at strength as the Fed contemplates its next moves on monetary policy.
One area that Fed officials have stressed to not be a source of inflation is the labor market, and wages grew slightly less than expected. Average hourly earnings increased 0.3% on the month, which was in line with forecasts, but the 12-month gain of 3.9% was slightly below the outlook and indicative that wage inflation at least is becoming less of a factor.
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