US Payrolls Pick Up, Wages Gain as Labor Market Stays Solid

US job growth picked up in December and wage gains exceeded expectations, diminishing prospects for a Federal Reserve interest-rate cut in March.

Nonfarm payrolls increased 216,000 after a downwardly revised 173,000 advance in November, a Bureau of Labor Statistics report showed Friday. The unemployment rate held at 3.7% as the workforce shrank. Average hourly earnings rose 0.4% from a month earlier.

Metric Actual Median estimate
Change in payrolls (MoM) +216k +175k
Unemployment rate 3.7% 3.8%
Average hourly earnings (MoM) +0.4% +0.3%

The advance in payrolls was led by health care, government, construction and leisure and hospitality. A measure of the breadth of job gains picked up.

The December figures wrap up another solid year for a labor market that has served as the main engine for resilient consumer spending. The healthy economic growth that followed surprised many economists in 2023, prompting many to rethink their recession calls.