The U.S. job market closed out the year with a modest gain. Employers added about 50,000 jobs in December, roughly matching expectations, while the unemployment rate dipped to 4.4% from 4.6% in November. That slight improvement came after a choppy stretch in 2025, which started strong but cooled noticeably by late spring, with several months later revised to show deeper job losses than first reported.
Those revisions tell an important part of the story. Another 68,000 jobs were cut from October payrolls, and November was revised down as well, suggesting the labor market was weaker at the end of the year than initially thought. Overall, payroll employment rose by 584,000 in 2025, a sharp slowdown from the 2 million jobs added in 2024. Some analysts described the finish as mixed and concerning, noting that the coming months will help determine whether this is a late-cycle slowdown or something more persistent.
December’s job gains were concentrated in a few areas. Restaurants and bars led the way, followed by healthcare and social assistance. Retail lost jobs, while federal government hiring remained largely unchanged after a year marked by significant layoffs. Other major sectors, including manufacturing, construction, and transportation, were largely flat.
Despite the slight drop in unemployment, many Americans don’t feel confident about their prospects. A December survey from the New York Fed found people believe they have just a 43% chance of finding a new job if they lose their current one, the lowest reading since the survey began in 2013.
Some private-sector reports offer a more optimistic note. ADP reported modest job growth in December, and data from Challenger, Gray & Christmas showed announced job cuts fell to their lowest level in more than a year, even though total layoffs for 2025 were the highest since 2020.
Looking ahead, the December report is unlikely to prompt an immediate change in interest rates. After three straight cuts, most forecasters expect the Federal Reserve to hold steady at its late-January meeting, giving earlier moves more time to work through the economy.
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