- U.S. employers added 50,000 jobs in December, well below expectations.
- The national unemployment rate dropped to 4.4%.
- The U.S. added 584,000 jobs in 2025, down from 2 million in the year before.
The final federal employment report for 2025 finds the U.S. jobs market ended the year on a downbeat even as the national unemployment rate eased a bit after hitting a four-year high in November.
Friday’s Labor Department employment summary shows U.S. employers added 50,000 new positions in December, well below the 73,000 most economists were predicting and down from November’s tally of 56,000 new jobs. The national unemployment rate came in at 4.4% last month, down from November’s 4.5%.
The report also included revisions to October and November data with job numbers for those two months reduced by 76,000. Total job growth for 2025 was 584,000 or an average of about 49,000 new hires per month. The tally is well below the year before when U.S. employers added 2 million new positions and average monthly job growth hit 168,000.
“The jobs report is a mixed bag, with both positive and negative aspects,” Art Hogan, chief market strategist at B. Riley Wealth, told CNBC. “We continue to see an environment where companies are slow to hire and slow to fire. The overarching takeaway in today’s report is that there is more good news than bad in the first on-time jobs report in three months.”
Restaurants and bars did the most hiring in December, adding 27,000 new employees, while employee rolls in the health care sector grew by 21,000 jobs. U.S. retail businesses experienced the biggest job declines in the final month of 2025, shedding 25,000 jobs.
Heather Long, chief economist at Navy Federal Credit Union, said 2025’s job gains of 584,000 marks the worst year outside of a recession since 2003, per CNBC.
“It’s fair to say that 2025 was a hiring recession in the United States,” Long wrote. “The United States is experiencing a jobless boom where growth is strong, but hiring is not. It’s a great scenario for Wall Street, but an uneasy feeling on Main Street.”
How will Fed react to new jobs data?
Friday’s report will be the last government jobs data the Federal Reserve sees before its first meeting of the year later this month.
The Fed closed out 2025 with three straight reductions to its benchmark federal funds rate, moves aiming to bolster a lagging U.S. jobs market even as inflation continues to run well above the U.S. central bank’s 2% target rate. Both sides of the monetary body’s dual mandate of maximum employment and price stability have been under threat amid recent economic conditions.
Generally speaking, rate reductions help spur economic activity by reducing the cost of debt which can promote business activities like investment and hiring. Rate hikes, which increase the cost of consumer and commercial debt, quell spending and help slow down inflationary price increases.
The trio of rate reductions in the Fed’s final three meetings of 2025 reflects the monetary body’s decision to prioritize the labor side of its two-part mandate. At a press conference following its December meeting, Fed chairman Jerome Powell pointed to the policy dilemma facing committee members.
“You have one tool,” Powell said. “You can’t do two things at once.”
While most market watchers were already predicting the Fed would not make a fourth interest rate cut at its January policy meeting, chances of a rate reduction to start 2026 declined even further after the release of new federal jobs data.
“The prospect of a January Fed rate cut has all but vanished following the unexpected drop in the unemployment rate,” Seema Shah, chief global strategist at Principal Asset Management, said in a note, per CNN.