A “Now Hiring” sign at the Appalachian State University Internship and Job Fair on Friday, October 24, 2025 in Boone, North Carolina, USA.
Alison Joyce | Bloomberg | Getty Images
The U.S. labor market ended 2025 on a weak note, with job creation lower than expected in December, according to a report released Friday by the Bureau of Labor Statistics.
Nonfarm payrolls increased by a seasonally adjusted 50,000 jobs in the month, falling short of November’s downwardly revised figure of 56,000 and falling short of the Dow Jones forecast of 73,000.
At the same time, the unemployment rate fell to 4.4% versus the expected 4.5%.
The report paints a murky picture of the labor market, with businesses reporting low levels of employment, but households showing an increase in employment.
Additionally, due to the revision, the previous month’s total decreased. Employment numbers for November were revised down slightly to a total of 8,000, but the decline in October was even larger than originally reported, at 173,000 compared to the previously expected 105,000.
The average monthly payroll increase for the full year was 49,000 jobs, compared to 168,000 jobs in 2024, according to the BLS.
Federal Reserve officials are closely monitoring the employment situation for guidance on future interest rate trends.
Despite the Fed’s three policies approved late last year, as well as calls for further rate cuts, the economy appears to be in pretty good shape as a tumultuous year comes to an end.
Future economic data from the Atlanta Fed shows that gross domestic product (GDP) will grow at an annualized rate of 5.4% in the fourth quarter. This follows a third-quarter result in which the broader growth measure rose 4.3%.
Additionally, consumers, who support two-thirds of the $31 trillion U.S. economy, spent heavily during the holiday season. Adobe estimates that online spending rose 6.8% year over year to $257.8 billion, a record high.
The market expects the Federal Reserve to keep policy unchanged for a certain period of time following a series of interest rate cuts that began in September. The next round of job cuts will not be factored in until June, but that could change following the release of employment statistics.
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