U.S. hiring slowed to a crawl in December, capping a year of subdued employment gains that have frustrated job seekers even as layoffs remained low and unemployment edged down. Employers added just 50,000 jobs last month, nearly unchanged from a downwardly revised 56,000 in November, the U.S. Labor Department reported Friday.
The unemployment rate slipped to 4.4% from 4.5%, its first decline since June, offering a measure of reassurance after four straight increases. Economists said the data point to a labor market that has stabilized but is expanding far more slowly than in recent years.
Businesses appear reluctant to add workers despite firmer economic growth. Many companies hired aggressively after the pandemic and no longer need to fill positions, while others are holding back amid uncertainty tied to shifting tariff policies under Donald Trump, persistent inflation and the spread of artificial intelligence, which could alter or replace some jobs.
The report landed as policymakers at the Federal Reserve debate their next steps. Weakening employment last year prompted the Fed to cut interest rates three times. While some officials favor holding rates steady to keep pressure on inflation, others worry that hiring has nearly stalled and argue for lower borrowing costs to support growth.
Revisions underscored the softness. November’s job gain was trimmed from 64,000 to 56,000, and October now shows a loss of 173,000 jobs, steeper than previously estimated. The government revises figures as more employer survey responses are received.
December’s modest gains were concentrated in a few sectors. Health care added 38,500 jobs, restaurants and hotels gained 47,000, and state and local governments added 13,000 positions. Manufacturing, construction and retail all shed jobs, with retailers cutting 25,000 roles, a sign of weaker-than-usual holiday hiring. Manufacturers have lost jobs every month since April, when sweeping tariffs were announced.
For all of 2025, the economy added just 584,000 jobs, sharply down from more than 2 million in 2024 and the smallest annual increase outside a recession since 2003. Even so, the slowdown is not as dire as it once would have been. An aging population and lower immigration mean fewer jobs are needed to keep unemployment steady, and layoffs remain low in what economists describe as a “low-hire, low-fire” market.
Source: U.S. Labor Dept.