The December jobs report comes in stronger than expected

Although the unemployment rate is higher than at the beginning of the year, the job market ended the year, with 256,000 jobs added to the economy in December according to data released on Friday US Bureau of Labor Statistics (BLS).

Unemployment ended the year at 4.1%, down from 4.2% the previous month. The unemployment rate has increased to 4.1% or 4.2% in the past seven months. The number of unemployed people was 6.9 million in December.

The majority of job gains in December occurred in the caregiving (+46,000), government (+33,000 jobs), retail trade (+43,000 jobs), and social assistance (+23,000 jobs) sectors.

The construction sector showed little change month-over-month, adding just 8,000 jobs. Residential construction added 3,500 jobs since November, while specialty trade contractors added just 500 positions.

The housing and rental and leasing industry gained just 3,200 jobs in December, while the real estate sector lost 1,700 jobs.

Economists believe that consumers and The Federal Reserve should be pleased to see not only strong job growth in December, but also that average wages rose 3.9% year over year, faster than the rate of inflation.

“While higher prices are weighing on consumers’ minds, the fact that wages continue to rise faster than inflation shows that many individuals and families—including those looking to buy a home—still feel confident about their financial situation,” Lisa Sturtevant, senior economist at Bright MLSsaid the statement.

Sturtevant added that while wage growth is positive for the housing market, how the labor market will affect the housing market will depend on where workers are doing those jobs.

“As many employers are calling employees back to the office full-time, those looking to buy homes will have different priorities,” she said.

The Fed indicated that inflation is expected to remain a concern through 2025.

“Proposed policies from the incoming administration, including those related to taxation and immigration, could have an impact on inflation, possibly leading to a cooling of job growth,” said Sturtevant.

In accordance with An MBA senior vice president and chief economist Mike Fratantoni, the Fed will likely hold off on rate cuts because of the data.

“This will increase mortgage rates in the near term,” Fratantoni said.

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