Nonfarm payroll employment rose by 256,000 in December 2024, comparable to the September figure. The last time the figure was higher was in March 2024 (310,000). The private sector results are important for assessing the economy's resilience. With 223,000 jobs added in December, it was also the best performance since March 2024 (232,000).
Long-Term Employment Trends and Population Adjustments
To determine long-term trends, the percentage increase must be adjusted to account for population change. December's gain represented 0.16% of U.S. private sector employment, with increases of 0.10% over three months, 0.09% over six months, and 0.11% over twelve months.
Discussions about a stabilizing labor market refer to three-month momentum. From August to October, three-month gains averaged between 0.06% and 0.09% per month, but this has since improved to 0.10% starting in November. This is still below the medium-term trend (2017 – 2019) of 0.13% monthly growth and the long-term trend (2011 – 2019) of 0.16%.
Recession Indicators and Labor Market Cooling
The labor market is cooling, but there are no signs of a recession. A recession typically occurs when employment declines for three consecutive months, and before that, the semiannual growth rate falls to 0 – 0.05% monthly growth. One reliable indicator of the onset of a recession — the semiannual change in professional and business services employment — shows a near-zero trend (-2,000 for the six months), stabilizing after a 41,000 decline in November 2024. There is no deterioration, but the trend is very weak.
Sectoral Employment Analysis
When evaluating employment growth over the past six months, the private sector added 772,000 jobs. Of this, industry and construction contributed 11,000 jobs, while services contributed 761,000. Within services, two sectors — health care (+420,000) and food service/hospitality (+162,000) — accounted for more than three-quarters of the total growth, while declines occurred in information (-11,000) and professional and business services (-2,000).
While the data from July to October showed limited signs of a potential recession, the last two reports were relatively strong, especially considering the deteriorating labor market conditions.
Conclusion
Employment data for December 2024 show a resilient U.S. labor market, with 256,000 jobs created, the strongest growth since March 2024. Key sectors such as health care and food service/hospitality led private sector growth, adding 223,000 jobs.
Although growth has slowed compared to the pre-pandemic period, the three-month figures show signs of stabilization. Signs of recession, such as sustained job losses, are absent.
Overall, the labor market remains stable, supported by strong industries, although key trends should continue to be monitored in an uncertain economic environment.