WASHINGTON, Jan 10 (Reuters) - U.S. job growth accelerated unexpectedly in December, with nonfarm payrolls increasing by 256,000 jobs, far exceeding economists’ expectations of 160,000, while the unemployment rate fell to 4.1%, down from 4.2% the previous month. This robust performance reflects a solid end to the year for the labor market and suggests a careful approach by the Federal Reserve regarding interest rate cuts in 2025, according to reports from Reuters.

The Labor Department's closely monitored employment report shows November's figures were also revised, indicating a previous addition of 212,000 jobs instead of the earlier reported 227,000. The diverse array of job gains points to a resilient economy buoyed by historically low layoffs, which in turn has been facilitating consumer spending through rising wages.

Despite substantial interest rate hikes in 2022 and 2023 by the U.S. central bank, the economy continues to expand at rates significantly above the 1.8% threshold considered non-inflationary. Concerns linger, however, due to President-elect Donald Trump's impending trade policies that could impose significant tariffs on imports and lead to broader immigration crackdowns, both of which could disrupt current labor market trends.

The average hourly wage saw a 0.3% increase in December, with the annual growth rate holding steady at 3.9%, slightly down from 4.0% the month before. These wage trends are crucial as they underscore the labor market’s ongoing strength, even in the face of rising costs and inflation.

Despite signals of improved hiring sentiment after Trump's election victory, which raised hopes for forthcoming tax cuts and relaxed regulations, economists remain cautious. There are no indications from recent business surveys of companies planning to considerably increase their workforce.

The data from December reveals that while job opportunities are rising, the overall landscape is somewhat mixed, with the persistent increase in the number of individuals experiencing permanent job losses and a corresponding rise in unemployment duration, which hit a nearly three-year high of 10.5 weeks.

Meanwhile, the Federal Reserve, recognizing the economy’s resilient nature and ongoing inflationary pressures, recently adjusted its projection for rate cuts this year, now forecasting just two quarter-point reductions, down from four predicted previously. Since beginning its easing cycle in September, the Fed has reduced the benchmark overnight rate by a total of 100 basis points, bringing it into the 4.25%-4.50% range.

As the labor market shows signs of resilience, cautious optimism remains the order of the day among economists, who argue that ongoing scrutiny of both employment trends and inflationary pressure will be essential in shaping future economic policies. For further details, refer to the full report by Reuters.