U.S. December non-farm employment data falls short of expectations, slight decrease in unemployment rate fails to mask worsening labor market trends

PANews, January 9th – According to Jinse Finance, data released by the U.S. Bureau of Labor Statistics on Friday showed that 50,000 new jobs were added in December, lower than economists’ forecast of 60,000. The unemployment rate fell to 4.4%, compared to 4.6% in November. After the data for November and October were severely affected by the government shutdown, this release provides the most complete picture of the U.S. job market in months. The number of new jobs added in November was revised down to 56,000 from the initial value of 64,000. This data release further confirms signs of deterioration in the labor market, as federal government workforce reductions and a slowdown in private sector hiring have taken a toll. The Federal Reserve has lowered U.S. borrowing costs at each of its last three meetings, keeping its benchmark target interest rate range at a three-year low of 3.5-3.75%. In December, Federal Reserve Chair Powell suggested that the threshold for further rate cuts was high, stating that current borrowing costs are “in a good place.” However, the weak December data may complicate the Fed’s rationale for pausing the rate-cutting cycle at its next meeting later this month. The Fed has also raised concerns about the accuracy of recent Bureau of Labor Statistics data, with Powell believing that the U.S. economy is adding 60,000 fewer jobs per month than the employment reports claim.