U.S. December Non-Farm Payrolls Data Falls Short of Expectations; Slight Decrease in Unemployment Rate Cannot Hide Worsening Labor Market Trend

PANews January 9 News, according to Jinshi reports, data released by the U.S. Bureau of Labor Statistics on Friday show that 50,000 new jobs were added in December, below economists’ forecast of 60,000. The unemployment rate dropped to 4.4%, from 4.6% in November. After the November and October data were severely affected by the government shutdown, this release provides the most comprehensive picture of the U.S. labor market in months. The November increase in employment was revised down to 56,000, from the initial estimate of 64,000. This data further confirms signs of deterioration in the labor market, with federal government workforce reductions and slowing private sector hiring impacting it. The Federal Reserve has lowered U.S. borrowing costs in each of the past three meetings, maintaining its benchmark target rate range at 3.5-3.75%, the lowest in three years. Fed Chair Powell hinted in December that the threshold for further rate cuts is high, stating that current borrowing costs are “in a good place.” However, weak December data may complicate the Fed’s reasons for pausing the rate cut cycle at its upcoming meeting later this month. The Fed also expressed concerns about the accuracy of recent Labor Department data, with Powell believing that the U.S. economy adds 60,000 fewer jobs per month than reported.