US job creation in 2025 slows to weakest since Covid

The job market in the United States saw only modest growth in December, wrapping up a lackluster year for employment in the country. Employers added 50,000 jobs in the final month of 2025, falling short of expectations. However, there was a silver lining as the unemployment rate dipped to 4.4%.

Last year marked the smallest job gains since 2020, a year overshadowed by widespread job cuts due to the Covid-19 pandemic. The business environment in the US has been influenced by significant policy changes implemented by President Donald Trump, such as tariffs, an immigration crackdown, and cuts to government spending.

Despite these challenges, the US economy managed to hold steady, with a growth rate of 4.3% in the three months leading up to September. This growth was driven by consumer spending and an increase in exports. However, the job market did not see a corresponding increase in job creation.

Throughout 2025, the US added an average of 49,000 jobs per month, a significant decrease from the estimated two million jobs added per month in the previous year. Additionally, the Labor Department revised its estimates, revealing that 76,000 fewer jobs were created in October and November than initially reported.

While sectors like retail and manufacturing reported losses in December, hiring in healthcare, bars, and restaurants helped offset these declines. The data highlights the mixed dynamics facing job seekers in the US, where hiring has slowed down but mass layoffs have not materialized.

In response to the economic slowdown, the US Federal Reserve has cut its key lending rate in an effort to stimulate the economy. The central bank reduced interest rates three times in 2025, bringing the key lending rate to around 3.6%, the lowest level in three years.

Despite these efforts, policymakers remain divided on how low borrowing costs should go. The latest job market figures are unlikely to provide a clear resolution to this debate. The jobless rate, which had risen to 4.5% in November, dropped back to 4.4% in December.

Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management, noted that the labor market is no longer favoring job seekers. She predicted that the Fed will continue to lower rates in the coming year, but the markets may need to exercise patience as the economy navigates these uncertain times.