U.S. Employment Growth Surpasses Expectations In December 2024

According to Odaily, a report from CITIC Securities highlights that the U.S. non-farm payrolls for December 2024 significantly exceeded expectations, with major contributions from healthcare services, leisure and hospitality, retail, and government sectors. The unemployment rate decreased, and wage growth remained steady, indicating a healthy job market throughout 2024. Immigration played a notable role in job creation, although the total number of new jobs was lower than in 2023, aligning with levels seen in 2018. However, if former President Trump implements policies to reduce immigration upon returning to the White House, a decrease in new jobs is anticipated for 2025. Following the release of December's employment data, market expectations for a Federal Reserve rate cut were lowered. It is believed that the market's current pricing for a rate cut in the latter half of this year holds limited significance. The report maintains the view that the Federal Reserve will pause rate cuts at the January meeting, with clearer guidance potentially emerging in March. Nonetheless, there is a risk of U.S. Treasury yields and the dollar index rising again if the Consumer Price Index (CPI) exceeds expectations or if the market engages in 'Trump trades' before his inauguration.