Jobs report December 2025:
The U.S. labor market closed out 2025 on a softer note than expected, with job creation in December falling short of estimates, according to a report released by the Bureau of Labor Statistics on Friday.
Nonfarm payrolls increased by a seasonally adjusted 50,000 in December, lower than the revised 56,000 in November and below the Dow Jones estimate of 73,000. Despite this, the unemployment rate dropped to 4.4%, beating the forecast of 4.5%.
A broader measure that includes discouraged workers and those in part-time roles for economic reasons also saw a decline to 8.4%, down 0.3 percentage points from November. The household survey reflected an increase of 232,000, while the labor force participation rate dipped slightly to 62.4%.
The report presented a mixed view of the labor market, with companies reporting sluggish hiring while households showed employment gains. Following the release, stock market futures saw gains, and Treasury yields remained stable.
Revisions to prior months’ data also showed a downward trend. November’s total payrolls were revised downward by 8,000, while October’s losses were revised even lower to 173,000 from the initial estimate of 105,000.
For the full year, average monthly payroll gains stood at 49,000, a significant drop from the 168,000 average in 2024.
Art Hogan, chief market strategist at B. Riley Wealth, commented on the report, stating that while there are both positive and negative aspects, the overall takeaway is more positive than negative in the first timely jobs report in three months.
The government shutdown had delayed prior reports, leading to a 43-day halt in data collection and report publication.
In terms of sector-specific data, job gains were led by the restaurant and bar industry, which added 27,000 jobs. Healthcare saw an increase of 21,000 jobs, and social assistance added 17,000. However, retail reported a decline of 25,000 jobs, and the government added just 2,000.
Average hourly earnings rose by 0.3% in December, in line with forecasts. The annual increase of 3.8% was higher than expected by 0.2 percentage points. The average workweek slightly decreased to 34.2 hours.
Federal Reserve officials closely monitor the job market for insights into future interest rate decisions. The annual payroll gain of 584,000 for 2025 was the lowest outside of a recession since 2003.
Despite calls for additional rate cuts, the economy appeared to be in a strong position as the year closed. The Atlanta Fed’s economic data indicated a 5.4% annualized GDP growth rate in the fourth quarter.
Consumer spending remained robust, with online holiday spending reaching record levels. Market expectations suggest that the Fed will maintain its current stance on interest rates, with the next rate cut not expected until June.
The BLS had a tumultuous year, with President Trump replacing the former Commissioner in August. The January report is expected to provide a clearer view of the labor market after the challenges posed by the government shutdown.
