Friday’s jobs report may offer a mixed view of the labor market. what to expect

The December jobs report is likely to provide only limited clarity on where the labor market is headed, and experts differ on how pronounced the slowdown in hiring is.

From a consensus perspective, economists expect the Bureau of Labor Statistics to report Friday morning an increase of 155,000 in nonfarm payrolls, one step below the Surprising increase of 227,000 in November but roughly in line with the four-month average. The unemployment rate is expected to remain stable at 4.2%.

However, the details of the report will be key, and some on Wall Street expect the figure to be a little weaker, depending on how seasonal trends and other factors play out.

“We’ve seen a little bit of weakening, and I think we’ll continue to see that, but it’s still a good (job) market overall,” said Maureen Hoersten, chief operating officer and interim CEO of LaSalle Network, a staffing firm with headquarters in Chicago. “Things are stabilizing a little bit. People are still a little cautious, trying to understand this new year and the new economic and political climate.”

On average, the economy in 2024 added about 180,000 jobs per month through November, although data has been volatile and somewhat confusing lately. Federal Reserve Governor Michelle Bowman said Thursday that labor market reports “have become increasingly difficult to interpret” due to measurement challenges, which have included a surge in new workers and low response rates. to the surveys.

The December report could also be harder to judge depending on how hiring workers during the holidays affects the numbers.

Goldman Sachs, for its part, estimates that payroll growth will be only 125,000 people, and that the unemployment rate will increase to 4.3%.

“Our forecast reflects a rebound in the labor force participation rate and lackluster household employment growth amid more challenging job search prospects,” the Wall Street bank said in a note. “We expect the slowdown in job growth in non-retail sectors, particularly professional services and construction, to more than offset higher retail hiring this month.”

Similarly, Citigroup predicts only 120,000 new jobs and an unemployment rate of 4.4%, which, economist Andrew Hollenhorst wrote, “should remind markets that the labor market has not stabilized and continues to weaken.” risks are balanced to an even softer reading.

However, Hoersten said he believes that once some of the current volatile factors subside, companies will continue to add staff, even if at a gradual pace. TO Bureau of Labor Statistics Report Tuesday put job openings in November at a six-month high of just over 8 million, while layoffs were little changed and the resignation rate, a measure of worker mobility, declined.

At the Federal Reserve’s December meeting, officials noted a “continued gradual easing of labor market conditions” but saw “no sign of rapid deterioration,” according to minutes published on Wednesday.

In a recent business survey, LaSalle Network found that 67% of small and medium-sized businesses plan to increase the number of employees in 2025, up from 74% the previous year. The survey also found that wage increases are expected to be smaller and that hybrid working is likely to continue to prevail as a wedge to compete with larger companies for workers.

Average hourly earnings are expected to show a 0.3% increase in December and a 4% annual rate from a year ago, little changed from November.

“Right now, I think things will stay pretty stable overall, nothing drastic one way or the other,” Hoersten said. “But I do think it’s still a good, strong market, and companies just needed to get over the slightly crazy weather of the last few months and get back to steady state.”