The December jobs report is due out Friday. What it’s expected to show

The U.S. labor market is expected to have shown slight improvement in December, offering some hope for the year ahead. According to the Dow Jones consensus, nonfarm payrolls likely increased by 73,000 last month, with the unemployment rate edging lower to 4.5%. While these numbers are a modest improvement from previous months, economists are cautious about getting too excited.

Throughout 2025, the labor market experienced ups and downs, with monthly gains ranging from 158,000 to losses of 105,000. Despite the fluctuations, the overall trend has been one of stability rather than significant growth. As we enter 2026, experts predict a labor market that is far from stellar but at least stable.

Amy Glaser, Senior Vice President of Business Operations at Adecco Staffing, believes that the year is ending on a positive note, with an increase in hiring and a slowdown in layoffs. She anticipates that 2026 will be a year of stability, with some ups and downs along the way.

While the unemployment rate is historically low, some Federal Reserve policymakers are concerned about underlying weaknesses in the labor market. They have cited a “systematic overcount” of payroll growth as a reason for caution, and have emphasized the need to strengthen the jobs outlook.

Market analysts are hopeful that the Fed will intervene if needed to support hiring in more cyclically oriented sectors. Job growth has been concentrated in areas like healthcare and government, which benefit from expansionary fiscal policy. Glaser expects this trend to continue in the coming year.

Another trend to watch in 2026 is retention, as companies focus on keeping their existing staff rather than aggressively hiring or laying off employees. Employers are investing in upskilling and reskilling programs to retain talent and remain competitive in the market.

The upcoming labor market report, set to be released on Friday, will be the first on-time report since the end of the government shutdown. Economists are eager to see the data gaps filled and expect a clearer picture of the labor market to emerge in the coming months. Overall, while the labor market may not be booming, there are signs of stability and cautious optimism as we move into the new year.