Employers added 50,000 jobs in December, capping a year of weak hiring

In December, employers in the U.S. added 50,000 jobs, wrapping up a year of subdued job growth marked by economic uncertainty. This figure fell slightly below the 55,000 forecasted by economists. The unemployment rate in December stood at 4.4%, down from 4.5% in November, as reported by the Bureau of Labor Statistics.

However, payroll gains for both October and November were revised downward, indicating that hiring was weaker than previously thought in those months. October saw a loss of 173,000 jobs, a significant increase from the previously reported 105,000 job decline. Similarly, November’s hiring numbers were revised down to 56,000 from 64,000.

“The labor market has shown continued resiliency, but it’s still softening, and the pace of year-to-date overall employment gains has slowed to the dragging pace of growth we saw in 2020,” stated Jerry Tempelman, vice president of fixed income research at Mutual of America Capital Management.

In terms of industries, hiring was strong in food services and drinking, health care, and social assistance, while the retail sector experienced job losses.

On the flip side, employers announced 1.2 million job cuts in 2025, a 58% increase from the previous year and the highest level since 2020, according to outplacement firm Challenger, Gray & Christmas. This trend was attributed to economic uncertainty, prompting businesses to scale back on hiring.

As a result of the challenging labor market conditions, the Federal Reserve made three interest rate cuts in late 2025 to stimulate hiring. Looking ahead, EY-Parthenon Chief Economist Gregory Daco predicts an average of 25,000 new jobs per month for the first half of 2026, with the unemployment rate potentially reaching 4.8%.

While 2025 saw weak hiring numbers, experts believe that the labor market is not on the verge of collapse. Chris Zaccarelli, chief investment officer for Northlight Asset Management, noted that there are warning signs but no imminent recession indicators.

In terms of interest rates, signs of stabilization in the labor market, particularly a lower unemployment rate, could prompt the Federal Reserve to pause on further rate cuts. Olu Sonola, head of U.S. Economic Research at Fitch Ratings, emphasized the importance of the unemployment rate in the Fed’s decision-making process.

Overall, while rate cuts are expected in 2026, they may not occur until later in the year. Lindsay Rosner, head of multi-sector fixed income investing at Goldman Sachs Asset Management, anticipates a temporary pause followed by two cuts later in the year.

In conclusion, the labor market in the U.S. faced challenges in 2025, but experts remain cautiously optimistic about the future outlook. The Federal Reserve’s decisions on interest rates will play a crucial role in shaping the trajectory of hiring and economic growth moving forward.