Before the strong December jobs report was released, the odds were already low for an interest rate cut in the next Federal Reserve decision on January 29.

The surprising 256,000 increase in new jobs in December and a declining unemployment rate is good news, but the latest employment reports masks recent softness in the labor market. The increase in new jobs in December, for example, was centered on just four industries: Health care, government, retail and leisure and hospitality.

The US economy closed out 2024 with another month of massive job growth, adding 256,000 positions in December.

"I think really the market is saying maybe no rate cuts in 2025, and that the 10-year could very easily break well above 5%," Jeremy Siegel said.

Friday’s unexpectedly big increase in December nonfarm payrolls led to a diminished market-based likelihood for any rate cut by the Federal Reserve until September, based on one method of calculating expectations — and one big bank sees the risks tilting toward a rate hike.

Employers added 256,000 jobs in December, blowing past economists' expectations and signaling that the job market remains resilient in the face of still-high borrowing rates and stickier-than-expected inflation.

The U.S. dollar rallied across the board on Friday after data showed the world's largest economy created more jobs than expected last month, reinforcing expectations that the Federal Reserve will pause its rate-cutting cycle at its policy meeting later this month.

US employers added a surprisingly strong 256,000 jobs in December — dimming hopes that the Federal Reserve will cut interest rates anytime soon. The blowout number from the US Bureau of Labor Statistics — a massive jump from the month before as hiring rebounded from strikes and major hurricanes — pushed back traders’ bets for the central bank to cut rates to October versus a previous consensus in June or July,