Employment stats: US hiring picks up in December

WASHINGTON — The American economy created a burst of new jobs in December, capping a solid year of employment growth marked by big gains in healthcare and government payrolls, according to new figures released Friday.

The 256,000 jobs added last month were the most since March and far exceeded analysts' expectations. The nation's jobless rate edged down to 4.1% from 4.2% in November. And average hourly earnings for all private employees rose last month at an annual rate of 3.9%, more than a percentage point higher than the latest inflation rate.

While Friday's jobs report was good news for workers, U.S. stocks slumped badly as investors fretted that the Federal Reserve would postpone and possibly even cut short its plans to further reduce interest rates. Since September the Fed has lowered borrowing costs at three straight meetings as inflation had trended down from previous highs. More recently, though, consumer prices have gone back up a bit. Fed policymakers next meet at the end of this month.

California's employment picture for December will be released in two weeks; its latest unemployment rate, for November, was 5.4%.

The Los Angeles area wildfires, which have destroyed thousands of buildings and disrupted normal economic activity in the region, aren't likely to affect national employment data but could weigh on California's job numbers in the very near term. Estimates of the extent of the damage from the fires are well into the tens of billions of dollars.

However, previous disasters suggest that after an initial downturn, employment will recover as rebuilding accelerates, boosted by a flurry of insurance payments, federal relief money and personal resources. Historically, employment and wages in construction have increased in the months following wildfires, and professional and business services also saw gains, said Michael Bernick, an employment attorney at Duane Morris in San Francisco.

In the meantime, he said, workers who are laid off, furloughed or have their hours cut significantly due to the fires may be eligible for full or partial unemployment insurance payments. Self-employed workers, who generally are not eligible for jobless benefits, may qualify for disaster unemployment assistance as they can show impact on their businesses.

Looking further ahead, the jobs situation in the U.S. and California is more cloudy.

On one hand, economic growth and consumer spending remain healthy. And surveys indicate that business leaders are generally optimistic about hiring more workers in the coming months, expecting the incoming Trump administration to cut business taxes and regulations.

On the other hand, separate government and private sector reports show there are fewer job openings today than a year ago. And many people are concerned that President-elect Donald Trump's plans to increase tariffs broadly and deport millions of workers without proper documentation will spur inflation and hurt economic growth.

Mass deportations could hit California's labor market particularly hard because it's already constrained by shortages in some areas. "Yes, the population in California has stabilized, but that's not enough to grow the labor force," said Christopher Thornberg, an economist and founding partner of Beacon Economics in Los Angeles.

What's clear is that Trump will inherit an economy that has been very resilient.

According to Friday's report from the Bureau of Labor Statistics, the U.S. economy added a healthy 2.2 million jobs last year, compared with very strong growth of 3 million in 2023. However, job statistics for last year are expected to be revised down when annual revisions are reported in March.

California's job growth in 2024 lagged behind the nation's, in large part because of layoffs at tech firms and weakness in manufacturing and the information sector, which includes the film industry.

Through November, the state added about 167,000 payroll jobs last year, or about 15,000 a month. That represents about 8.5% of all the new jobs in the U.S., less than California's 11.5% share of the nation's labor force, according to figures from the Bureau of Labor Statistics.