Investing.com — The release of strong U.S. payrolls data prompted traders to adjust their expectations for the Federal Reserve’s next rate cut, which is now forecast to happen just once in 2025 and in October at the latest.
This is a significant shift from the previous week when traders were considering a potential rate cut in June or July.
Data on recent jobs gives a clearer picture of the labor market, without any disruptions caused by weather or strikes.
These figures support the idea that the US economy is becoming less reliant on monetary policy support.
The US economy registered an increase of 256,000 jobs and the unemployment rate decreased slightly, the Labor Department said in a statement released on Friday. 4
December’s increase in nonfarm payrolls beat economists’ expectations by 155,000 jobs, according to a Wall Street Journal survey. The unemployment rate of 4.1% also beat expectations of 4.2%.
These results point to a recovery in the US labor market from the mid-year slump, with potential signs of acceleration.
Average hourly earnings also saw growth, climbing 0.3% from November to $35.69. This represents an increase of 3.9% compared to December 2023.
Stocks fell sharply after the jobs report came out as strong jobs data is likely to bolster the Federal Reserve’s strategy to slow the frequency of interest rate cuts in the coming months.
