The Job Market Is Still Historically Tight

The December 2024 jobs report, the last before President-elect Trump takes office, reveals a labor market that is much tighter than it was eight years ago before President Trump first took office, but depending on the data point, not quite as tight as it was just before the pandemic.

There has been a growing narrative that the jobs market is weakening and workers are finding it harder to get jobs. The truth is that the labor market remains historically tight, even though it isn't as scalding hot as it was in the months and years after the COVID pandemic. The biggest problem with the labor market is that we don't have enough workers. 

Compared to eight years ago, labor force participation is down, job openings are up, and the number of workers available for job openings is way down. In fact, there is less than one worker for every job opening in the economy. 

If we had the same participation rate now as February 2020 (pre-COVID), there would be more than 2.1 million more workers in the labor force.

Why it matters: The capacity of the U.S. economy to re-shore industries, expand domestic manufacturing, and increase home construction, amongst other activities, will be limited by a lack of available workers.

Here are a few important data points from the December jobs report: 

• Job gains were 256,000 in December. The average over the previous 12 months was 189,000 jobs.
• Expectations were for 155,000, so this was well above that.
• October and November numbers were revised down a combined 56,000.
• The labor force grew by 243,000. 
• Wages rose 0.28% from November; 3.9% annually compared to December 2023.

Keep up to date with the latest jobs and workforce data in the America Works Data Center.

About the authors

Curtis Dubay

Curtis Dubay is Chief Economist, Economic Policy Division at the U.S. Chamber of Commerce. He heads the Chamber’s research on the U.S. and global economies.

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Stephanie Ferguson Melhorn

Stephanie Ferguson Melhorn is the Senior Director of Workforce & International Labor Policy. Her work on the labor shortage has been cited in the Wall Street Journal, Washington Post, and Associated Press.

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