U.S. hiring engine kept humming

ECONOMY

Businesses added 2.2 million jobs last year

A sign soliciting job applications outside a fast-casual restaurant chain location in Manhattan. The economy added 2.2 million jobs last year. GRAHAM DICKIE — THE NEW YORK TIMES

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By Alex Tanzi

Bloomberg

The U.S. economy added 2.2 million jobs in 2024, a slowdown from the previous year but still a remarkable sign of resilience that few pundits had expected twelve months earlier.

Nonfarm payroll employment rose by 1.4% over the year, with an average of 186,000 net jobs added per month. That’s a faster pace than the last pre-pandemic year of 2019, though it’s down from a monthly gain of about 250,000 in 2023.

The resilience of America’s job-creating engine wasn’t necessarily in the cards at the start of the year, when many analysts were expecting the post-pandemic rebound to lose steam. The U.S. outperformance has left investors dialing back expectations of Federal Reserve rate cuts over the coming 12 months because getting inflation back down to target will be tougher in a still-buoyant economy.

“The monthly job growth trend in 2024 was mostly a continuation of 2023’s gradual cooling pattern, punctuated by a few unexpected bright spots,” said Cory Stahle, an economist at Indeed Hiring Lab. “While job gains are more moderate now than a few years ago, they still exceed the approximate 100,000-job clip needed to keep up with population growth — an encouraging sign of resilience.”

The biggest gains last year came in health care and social assistance — which accounted for more than 40% of additional net hiring — and in government, which took an almost 20% share. Increases in health-related jobs are largely driven by the aging of the population, and government hiring benefited from fiscal spending under the Biden administration.

Hospitality and construction were also among the main industries adding jobs, while manufacturing saw a decline in employment.The federal government employed over 3 million people, or about 1.9% of the civilian workforce, as of the end of last year, according to the BLS. That figure doesn’t count the roughly 1.3 million active-duty military personnel, who aren’t typically considered “employees.” About one-fifth of the US government workforce are employed by the postal service.

The numbers are likely to get marked down when the BLS publishes its annual revision to national estimates of employment, which is due on Feb. 7 along with the first jobs report for 2025. Preliminary data published in August pointed to a reduction of some 818,000 jobs for the 12 months through March 2024.