The US labor market showed modest growth in December as employers added 50,000 jobs to payrolls, according to data released by the Bureau of Labor Statistics. The monthly gain fell slightly below economist expectations of approximately 73,000 positions. The report capped a challenging year for employment, with the economy adding 584,000 jobs throughout 2025, substantially lower than the 2 million positions created during 2024.
Revisions to previous months revealed softer job growth than initially reported, with October and November combined now estimated to have added 76,000 fewer jobs than previously announced. October saw particularly steep losses, with employers shedding 173,000 positions during the longest US government shutdown in history. The unemployment rate declined to 4.4% in December after rising to a four-year high of 4.6% in November.
Economists characterize the current labor market as being in a “no hire, no fire” phase, where job growth persists but remains subdued. Data from the outplacement firm Challenger, Gray & Christmas indicated that December layoffs ran nearly half the level recorded in the previous month. Federal Reserve officials are expected to evaluate this employment data at their policy meeting at the end of January to determine whether to lower interest rates, which currently sit at a range of 3.5% to 3.75%, or maintain them at their present level. Minutes from the Fed’s December meeting showed members were divided, with some suggesting rates should remain unchanged for an extended period.
The data has sparked debate over economic conditions and policy direction. Democratic Senator Elizabeth Warren noted that 2025 job growth was among the weakest in over a decade outside the pandemic period. Treasury Secretary Scott Bessent called for the Federal Reserve to continue cutting rates, asserting that lower rates represent the missing ingredient for stronger economic growth. However, the Fed has signaled it will proceed cautiously, with Chair Jerome Powell indicating officials remain hopeful the labor market will stabilize while inflation continues to cool.
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