Actalent Labor Market and Economy Report: A Look at Trends in December 2024

Executive Summary

Job Growth

The U.S. economy added 256,000 jobs in December, much higher than anticipated. U.S. employment grew by about 2.2 million jobs, or 1.4%, year-over-year. Notable gains occurred in healthcare (+46,100), government (+33,000) and social assistance (+23,400).

Other industries Actalent supports experienced the following job growth and loss last month: aerospace and defense (+33,700), architecture and engineering (+7,400), automotive (-4,100), construction (+8,000), manufacturing (-13,000), scientific research and development (+500) and utilities (-300).

Unemployment and Labor Force Participation

The unemployment rate decreased slightly from 4.2% to 4.1% between November and December. From December 2023 to May 2024, the unemployment rate increased from 3.8% to 4.0%. It then stayed between 4.1% and 4.2% for the remainder of 2024. While the unemployment rate increased to over 4.0% this past year, it is important to note that this level is still historically low. This indicates that although some individuals may have experienced a longer job search, widespread unemployment was not observed in 2024.

The labor force participation rate was 62.5% in December and remained between 62.5% to 62.7% throughout 2024. Thus, the percentage of the U.S. population that was working or actively seeking work was relatively unchanged last year.

Unemployment rates specific to the industries Actalent supports were as follows for November: hospitals (1.6%), utilities (1.4%), professional and technical services (2.8%), manufacturing (3.5%), and construction (4.7%). 

Among skilled labor categories Actalent sources talent for, unemployment in software-IT-mathematics was 2.4%; architecture and engineering was 1.8%; and sciences (life, physical and social) was 1.7%.

Inflation

The year-over-year inflation rate increased by 2.9% between December 2023 and December 2024, slightly above November’s reading of 2.7%. The Federal Reserve made its third and final interest rate cut of 2024 in December, lowering its key interest rate by 25 basis points. The Federal Reserve now plans to make just two rate cuts in 2025, instead of four, due to still-high inflation, economic resilience and policy uncertainty. Fed Chair Jerome Powell emphasized that there is not a preset course of action for interest rates, and that monetary policy will adjust as the economy evolves.

Wage Growth

Average hourly earnings increased by 3.9% for the 12 months ending December, only slightly below the 4.0% increase recorded in November. “Real” average hourly earnings (wages adjusted for inflation) increased by 1.0% between December 2023 and December 2024. In other words, average hourly earnings are keeping up with inflation, but consumers may still be feeling the pressure of higher prices.