U.S. Job Growth Slows in December as Unemployment Dips to 4.4%

The U.S. labor market wrapped up 2025 on a softer note, with hiring slowing again in December even as the unemployment rate edged lower.

According to the latest report from the Bureau of Labor Statistics, nonfarm payrolls increased by 50,000 in December. That figure came in below the downwardly revised 56,000 jobs added in November and missed the Dow Jones estimate of 73,000.

At the same time, the unemployment rate slipped to 4.4%, slightly better than forecasts calling for 4.5%.

Mixed Signals From the Labor Market

The December report painted a mixed picture. Employers continued to hire at a slow pace, but household data showed stronger job gains. The broader unemployment measure, which includes discouraged workers and those working part time for economic reasons, fell to 8.4%, down from 8.7% in November.

The household survey showed employment rising by 232,000 people, while the labor force participation rate edged down to 62.4%. Together, the numbers suggest fewer people are entering the workforce even as more are finding jobs.

Markets reacted calmly. Stock futures moved higher after the report, while Treasury yields were little changed.

Revisions Weighed on Recent Months

Revisions to earlier data added to the cautious tone. November payrolls were revised lower by 8,000 jobs, and October losses were deeper than first reported, now showing a decline of 173,000 jobs.

For all of 2025, payroll growth averaged just 49,000 jobs per month, far below the 168,000 monthly average seen in 2024.

“The jobs report is a mixed bag,” said Art Hogan of B. Riley Wealth. “Companies are slow to hire and slow to fire. There’s more good news than bad, but momentum remains weak.”

Where Jobs Were Added — and Lost

Job gains in December were concentrated in services:

• Restaurants and bars: +27,000
• Health care: +21,000
• Social assistance: +17,000

On the downside, retail trade shed 25,000 jobs, and manufacturing slipped by 5,000. Government employment was mostly flat, adding just 2,000 jobs.

Wages Keep Rising

Wage growth remained steady. Average hourly earnings increased 0.3% in December, matching expectations. On a yearly basis, wages rose 3.8%, slightly faster than forecast. The average workweek edged down to 34.2 hours.

What It Means for Rates

Federal Reserve officials are watching labor data closely as they consider the next move on interest rates. The Federal Reserve cut rates three times late in 2025, but markets currently expect a pause in early 2026.

Despite weak hiring, the broader economy remains firm. GDP growth is tracking above 5% for the fourth quarter, and consumer spending during the holiday season hit record levels.

The December jobs report suggests the economy is cooling slowly, not stalling. Hiring is weaker, but layoffs remain limited, setting the stage for a cautious start to 2026 as policymakers balance growth, inflation, and labor market risks. For direct financing consultations or mortgage options for you visit 👉 Nadlan Capital Group.