The non-farm payroll data was hotter than expected and compounded by other labor market indicators that say the FOMC won’t cut interest rates this year. The headline figure was more than double the expected; unemployment fell to 4.1%, and wages rose roughly 4%. Job and wage growth signal that one Fed mandate is covered, and the other still needs attention.
The only bad news is that manufacturing employment contracted, but it is a small fragment of the economy, offset by government job gains and broad-based strength in services. The takeaway is that labor markets were solid at the end of 2024, and we’re heading into a seasonally strong hiring period. Employers will ramp up employment over the next few months to cover their Easter, Spring Break, and summer needs.
