Buffalo, New York, is projected to be the hottest major housing market in 2024, as reported by Zillow. Despite its cold climate, Buffalo's housing affordability and job growth are attracting young homebuyers, with a typical home valued at $248,445, well below the national average. The city's job creation rate outpaces new housing construction, suggesting potential price increases unless supply catches up. Buffalo's economic prospects are further bolstered by its designation as a federal "tech hub," promising significant federal investment in the region.
The U.S. economy surpassed expectations by adding 216,000 jobs in December, maintaining the unemployment rate at 3.7% and potentially easing the urgency for the Federal Reserve to cut interest rates. Despite the strong job growth and wage increases, the Fed has not committed to a timeline for easing monetary policy, suggesting a cautious approach amidst economic uncertainty. This robust job market performance, along with a year-end stock market rally, indicates a resilient economy that may be achieving a "soft landing" without triggering a severe recession.
U.S. Treasury yields surged following a report of stronger-than-expected job creation in December, reducing market expectations for Federal Reserve interest rate cuts. The two-year Treasury yield spiked nearly 10 basis points to approximately 4.48%, while the 10-year note increased by about 7 basis points to 4.07%. This rise in yields reflects a selloff in the bond market as investors adjust to the likelihood of a more hawkish Fed stance in response to robust employment data.
The US non-farm payrolls for November exceeded expectations with an increase of 216,000 jobs compared to the anticipated 170,000. Despite a downward revision of the previous month's figures and a decrease in the labor force participation rate, the unemployment rate remained steady at 3.7%, defying expectations of a slight increase. Average hourly earnings also rose more than expected on both a monthly and yearly basis, indicating wage growth. These robust employment figures led to a strengthening of the US dollar and affected market expectations for future Federal Reserve interest rate cuts.
The U.S. labor market is expected to show continued strength in the December jobs report, capping off a year of significant job gains and low unemployment rates not seen since the 1960s. Wage growth has finally outpaced inflation, benefiting workers, particularly those with lower incomes. The labor market's resilience has been supported by consumer spending, with notable improvements such as the all-time low Black unemployment rate and high labor force participation among women. Despite a cooling job creation rate due to Federal Reserve interest rate hikes to combat inflation, the economy has avoided a recession and layoffs remain low. Job growth has been concentrated in service-related industries, while sectors sensitive to interest rate hikes have seen little growth or losses. Economists warn of potential risks in 2024, including government shutdown threats and external economic shocks.
In December, U.S. companies exceeded job growth expectations with private payrolls increasing by 164,000, the highest since August, as reported by the ADP Research Institute and Stanford Digital Economy Lab. This surge in hiring comes alongside a slowdown in wage growth, suggesting a potential balance between sustained economic growth and reduced inflationary pressures.
The ADP National Employment Report indicated that U.S. private sector job growth in December exceeded expectations, with 164,000 jobs added compared to the 115,000 forecasted by economists. This growth occurred despite the Federal Reserve's interest rate hikes, with signs of inflation moderation and economic slowdown. Wage growth is also on a decline, reducing concerns of a wage-price spiral. The leisure and hospitality sector led the gains, while there were losses in manufacturing, natural resources, mining, and information. This precedes the Labor Department's jobs report, which is also expected to show employment growth.
The ADP National Employment Report for December revealed a 164,000 job increase in the private sector and a 5.4% rise in annual pay compared to the previous year. The report, which provides a high-frequency view of U.S. private-sector employment based on actual payroll data, indicated that job gains were led by the leisure and hospitality sector, while manufacturing saw losses. The data also showed a deceleration in pay growth, with job-stayers experiencing a 5.4% increase in annual pay. The report is a collaboration between the ADP Research Institute and the Stanford Digital Economy Lab.
The U.S. economy has shown resilience with a better-than-expected performance as the new year begins. Inflation rates have decreased, job growth has been strong with over 2.5 million jobs added last year, and the stock market is near record highs, defying previous recession forecasts. The Federal Reserve's aggressive interest rate hikes aimed at controlling inflation did not trigger a recession as anticipated. Supply chain improvements, increased workforce participation, and higher productivity have contributed to the economic stability. However, experts like Austan Goolsbee of the Federal Reserve Bank of Chicago caution that while the current situation is promising, achieving a full inflation reduction to the Fed's 2% target without a recession remains a challenge, and the economic outlook for 2024 is still uncertain with potential risks ahead.
