President Joe Biden is ending his term in office with a remarkably strong labor market. According to data released Friday by the Labor Department, employers added a surprising 256,000 jobs in December, the largest increase since March, and the unemployment rate dropped a tenth of a percentage point to 4.1%. Both numbers were better than analysts expected.

Most sectors of the economy saw job growth during the month, including healthcare (up 46,000 jobs), retail (+43,000) and government (+33,000). Manufacturing, however, was basically flat in December and negative for the year, with 87,000 jobs lost in the sector over the last 12 months. Wage growth was flat, too, but finished the year with a solid 3.9% gain.

All told, the U.S. economy created 2.23 million jobs in 2024, for an average of 186,000 jobs per month, bringing the total for Biden’s full term to more than 16 million, aided by a strong rebound from the Covid-19 pandemic. As Dan Primack of Axios notes, Biden’s job tally exceeds that of his immediate predecessors. Donald Trump saw net growth of 2.1 million jobs over his four years, though that number was significantly higher (6.6 million over the first three years) before the pandemic. Barack Obama’s total was 7.1 million, while George W. Bush oversaw an increase of 5.2 million jobs.

Biden took note of the strong labor market. “With today’s report … we have created over 16.6 million jobs over the course of my administration and this is the only administration in history to have created jobs every single month,” Biden said in a statement. “Although I inherited the worst economic crisis in decades with unemployment above 6% when I took office, we’ve had the lowest average unemployment rate of any administration in 50 years with unemployment at 4.1% as I leave.”

Biden added that although many experts thought it would take years for the U.S. to recover from the pandemic, the country is in an enviable position relative to other advanced economies, with the strongest growth among comparable nations. As acting Secretary of Labor Julie Su said, “The United States is the envy of the world, the only nation that has truly bounced back from the challenges of the pandemic. With pride, we hand the next administration an economy and a labor market that are strong and resilient, with opportunities for workers at their core.”

What the experts are saying: The December report provided more support for the idea that the U.S. has pulled off a soft landing following the pandemic, in which inflation is brought under control without a recession. “Goldilocks herself would be feasting on this combo of strong labor force engagement, real wage gains and low inflation,” said economist Julia Coronado.

RSM Chief Economist Joseph Brusuelas said the strength of the labor market suggests a case of “American exceptionalism” as far as the economy is concerned. “The great American jobs machine churns on,” he wrote Friday. “Hiring remains strong, wage growth clearly supports household consumption in the vicinity of 3% to 3.5% and the economy expanded at or above 3% over the final six months of last year.”

Austan Goolsbee, a former White House economic adviser and current president of the Federal Reserve Bank of Chicago, told CNBC that the numbers point to a remarkably resilient economy. “It’s a strong jobs report, it makes me comfortable that the job market is stabilizing at something like a full employment rate,” he said. He added that he is not concerned about the strong labor market contributing to a new inflationary surge.

Worries on Wall Street: Investors on Wall Street had a very different take, sending stocks sharply lower as they readjusted their expectations for interest rate cuts by the Federal Reserve this year. Investors now think the central bank will keep rates where they are at the next two meetings, holding rates higher for longer than previously expected. “Good news for the economy but not for the markets, at least for now,” said Wells Fargo Investment Institute Senior Global Market Strategist Scott Wren, per CNBC.

One analyst even said the odds of rate increases have grown as the Fed confronts a stronger-than-expected economy, which could get another boost from Republican tax cuts. “Our base case has the Fed on an extended hold” on rates, said Bank of America’s Aditya Bhave in a note to clients on Friday. “But we think the risks for the next move are skewed toward a hike.”

The bottom line: Biden is handing his rival and successor a sturdy labor market and a resilient economy. Major changes could be ahead, however, as the incoming Trump administration prepares to roll out new policies including lower taxes, higher tariffs and mass deportations, all of which hold the potential for uncertain and perhaps contradictory effects in the months ahead.

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