The U.S. economy added 256,000 jobs in December 2024, surpassing forecasts of 160,000 and marking the highest monthly gain in nine months. Sectors like healthcare (+46K), government (+33K), and retail trade (+43K) drove the surge, while manufacturing shed 13,000 jobs. 

‍

These figures highlight a resilient labor market, with 2024 seeing an average monthly job gain of 186,000—down from 251,000 in 2023 but still signaling robust economic activity.

‍

In response to this strong data, Bank of America and other major banks have revised their outlooks, with BoA now expecting no further rate cuts in 2025. Previously projecting two quarter-point reductions, the bank cited ongoing labor market strength and the risk of renewed inflationary pressures. Citigroup and Goldman Sachs also adjusted their forecasts, pushing expected rate cuts further into the year.

‍

The Federal Reserve, having already cut rates by 100 basis points since September, faces mounting challenges in balancing inflation control with economic growth. With inflation still a concern, the strong job market may force policymakers to maintain or even raise rates, contrary to earlier market expectations of easing financial conditions.