The report marks the latest indication that the economy is continuing to motor at a brisk clip, with the Federal Reserve having recently signaled that chances of a flurry of interest rate cuts in 2025 are fading.
Mortgage Bankers Association (MBA) senior vice president and chief economist Mike Fratantoni said in a note that the December figures strengthened the case for the Fed to hold off on trimming rates again.
While recent months have seen an increase in the number of workers who were unemployed for longer spells, Fratantoni highlighted that long-term unemployment dipped in December.
The overall picture is one of a strong jobs market, he said. “While the FOMC [Federal Open Market Committee] had indicated that they could slow the pace of rate cuts as we enter 2025, these data make at least a pause in cuts much more likely, which will push mortgage rates higher in the near term,” Fratantoni wrote.
Retail trade, healthcare, leisure and hospitality, and government sectors accounted for the majority of December’s jobs growth, but contraction in manufacturing continued.
