> At a Glance
> – Employers added 50,000 positions in December, little changed from November’s downwardly revised 56,000.
> – The unemployment rate edged down to 4.4%, its first drop since June.
> – Annual payroll growth through November was the smallest since early 2021, at 770,000 jobs.
> – Why it matters: With hiring stuck in low gear, the Fed may consider another rate cut at its January meeting.
America’s labor market limped across the 2025 finish line as December’s modest hiring gain locked in the weakest yearly job growth since the early-pandemic recovery. The latest data, released Friday by the Labor Department, show firms still wary of expanding head counts amid policy uncertainty and elevated inflation.
December Shows Little Momentum
Employers added just 50,000 positions last month, barely below November’s downward-revised 56,000. The unemployment rate dipped to 4.4%, but only because prior months were revised lower. November’s rate, for example, was changed to 4.5% from the initially reported 4.6%.
The muted tally caps a turbulent year:
| 2025 Period | Average Monthly Job Gain |
|---|---|
| Jan-Mar | 111,000 |
| Jun-Aug | 11,000 |
| Sep-Nov | 22,000 |
Why Hiring Remains Stuck
Businesses largely staffed up immediately after the pandemic and now see little need for more workers. Other forces have also cooled demand:
- Shifting tariff policies introduced on “liberation day” in April
- Inflation still running at 2.7%, well above the Fed’s 2% goal
- Rapid spread of artificial intelligence, trimming labor needs
Martha Gimbel, executive director of the Yale Budget Lab, said ahead of the release:
> “I’m really looking for a lot of that weakness to reverse in December, and if it doesn’t, I am going to start getting much iffier about the labor market.”
Benchmark Revisions Loom
The headline figures could look even weaker once annual revisions are published in February. Early estimates suggest payrolls for March 2025 may be cut by 911,000, while Fed Chair Jerome Powell has said ongoing reporting quirks could still overstate monthly gains by roughly 60,000.
Key Takeaways
- December’s 50,000 job gain offers little relief after months of tepid hiring
- Annual payroll growth through November was the softest since early 2021
- The Fed, which cut rates three times late last year, signaled it could pause until economic trends clear
- A sharply weaker report might revive the case for a January rate reduction
Markets and policymakers will comb next month’s release-complete with updated seasonal factors-for a cleaner view of whether the labor market can regain traction in 2026.
