Analysis: U.S. December Non-Farm Payroll Data Falls Short of Expectations, Slight Drop in Unemployment Rate Fails to Mask Deteriorating Labor Market Trend

Odaily News According to data released by the U.S. Bureau of Labor Statistics on Friday, 50,000 new jobs were added in December, falling short of economists' forecast of 60,000. The unemployment rate dropped to 4.4%, compared to 4.6% in November. Following severe impacts on the November and October data due to the government shutdown, this release provides the most complete picture of the U.S. job market in months. The November job growth figure was revised down to 56,000 from an initial reading of 64,000. This data release further confirms signs of deterioration in the labor market, which has been impacted by federal government workforce reductions and a slowdown in private sector hiring. The Federal Reserve has lowered U.S. borrowing costs at its last three meetings, keeping its benchmark target rate range at a three-year low of 3.5-3.75%. Fed Chair Powell hinted in December that the bar for further rate cuts is high, stating that current borrowing costs are already "in a good place." However, the weak December data may complicate the Fed's rationale for pausing its rate-cutting cycle at its next meeting later this month. The Fed has also raised concerns about the accuracy of recent Bureau of Labor Statistics data, with Powell suggesting that the U.S. economy is adding 60,000 fewer jobs per month than claimed by the employment reports. (Jin10)