Unemployment in the United States drops to 4.4% in December, but job creation falls short of expectations

The US labor market presented a mixed picture at the end of 2024, with conflicting signals maintaining uncertainty about the next moves of monetary policy. December employment data, released by the Bureau of Labor Statistics on Friday morning, mark the first regular report after months characterized by disruptions due to the autumn government shutdown.

Job creation below expectations

The American economy generated 50,000 new non-farm jobs in December, a figure that disappointed analysts’ estimates of 60,000 units. This result reflects a significant slowdown compared to previous surveys, although historical data have been revised downward. November’s increase was revised from 64,000 to 56,000, while October’s losses—initially estimated at 105,000—were dramatically revised to 173,000.

Unemployment rate pleasantly surprises

Despite the disappointing job creation performance, the US labor market showed another side of the coin: unemployment fell to 4.4%, surpassing consensus forecasts of 4.5% and improving from 4.6% in November. This unexpected decline caught many observers by surprise, suggesting a more resilient employment situation than the numbers on job creation alone might indicate.

Reactions in financial markets

Markets responded to the report with moderate enthusiasm. Bitcoin (BTC) remained almost entirely stable, just above $90,000 in the minutes following the announcement. Meanwhile, US stock index futures showed modest gains, with the Nasdaq up 0.4%. The yield on the 10-year Treasury remained steady at 4.18%, confirming uncertainty about the future direction of economic policy.

Outlook on the Federal Reserve

With the normal transmission of official economic data restored, market participants almost unanimously expect the Federal Reserve to keep its stance unchanged in January, after the rate cut implemented in December. However, expectations remain fragmented regarding further monetary easing at the March meeting, where the probability of a new rate cut is around 39%.