US adds 216,000 jobs in December as stronger than expected rise caps robust year

The US workforce added 216,000 jobs last month, more than expected by economists, capping another robust year of growth in the face of higher interest rates.

Policymakers, weighing when to start cutting borrowing costs, are closely monitoring the strength of the labor market as they try to guide the world’s largest economy to a so-called “soft landing”, where price growth normalizes and recession is avoided.

American employers had been expected by economists to add about 164,000 jobs in December, down from 173,000 the previous month. Recruitment across the public, healthcare, social assistance and construction sectors helped drive growth as 2023 drew to a close.

Overall, Friday’s official data showed that 2.7m jobs were added in the US economy over the course of last year – down from 4.8m in 2022.

While its growth has slowed, the labor force has defied fears of a downturn after the Federal Reserve launched an aggressive campaign to pull back inflation from its highest levels in a generation. It remained resilient last year in the midst of layoffs and strikes.

The headline unemployment rate stood at 3.7% in December, according to data released by the Bureau of Labor Statistics, in line with November.

While last month’s jobs growth reading was significantly higher than forecast by economists, the agency revised its estimates for October and November lower. As a result, the US workforce in these two months was some 71,000 jobs smaller than previously reported.

As price growth continues to decline, officials at the Fed – which last hiked interest rates in July – are now mulling the future of its battle. Jerome Powell, the central bank’s chairman, said last month that the historic tightening of monetary policy was probably over, and