As economists and workers grapple with sluggish hiring growth and meager job gains, the current state of the U.S. labor market is drawing widespread skepticism.
Data released by the U.S. Labor Department on Friday showed the U.S. economy added 50,000 jobs in December, against a backdrop of broad concerns about a cooling job market in 2025.
The unemployment rate fell to 4.4% from 4.6% in November. A Bloomberg survey of economists had projected a median gain of 70,000 jobs for this final employment report of 2025, with the unemployment rate expected to be 4.5%.
Meanwhile, revised data for November showed the addition of 56,000 jobs, down from the initially reported 64,000. The revised figure for October indicated a loss of 173,000 jobs, a larger decline than the previously reported decrease of 105,000.
The state of the U.S. job market continues to be contentious. Economists and workers are dealing with weak hiring momentum and thin job additions; however, the scale of layoffs remains relatively small. This situation has been described as an economy in a state of "no hiring, no firing." The American public is feeling the pressure: a survey by the Federal Reserve Bank of New York showed that in December, U.S. workers' perceived probability of finding a new job quickly within three months of becoming unemployed fell to a record low.
It is worth noting that the release schedule for the monthly employment reports only recently returned to normal after delays caused by last autumn's government shutdown.
Nevertheless, against a backdrop where market observers are eager for any signal of change, several private-sector data releases this week provided some comfort. Data from global career transition firm Challenger, Gray & Christmas showed that the number of layoff announcements in December dropped to the lowest level since July 2024. Employment data for the private sector released by Automatic Data Processing Inc (ADP) indicated that the private sector added 41,000 jobs in December.
The Bank of America Institute also stated this week that estimates based on its internal data showed a rebound in year-over-year wage growth in December, suggesting that "the most challenging period of this economic slowdown may be over."
Furthermore, the increase in initial jobless claims last week was slightly lower than economists had previously anticipated.
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