Sluggish hiring last month closed out a year of weak employment gains that have frustrated job seekers even as layoffs and unemployment have also been low.
Employers added 50,000 jobs in December, nearly unchanged from a downwardly revised figure of 56,000 in November, the Labor Department said Friday. The unemployment rate slipped to 4.4%, its first decline since June, from 4.5% in November, a figure also revised lower.
The data suggests that businesses are reluctant to add workers even as economic growth has picked up. Many firms hired aggressively after the pandemic and no longer need to fill more jobs. Others have held back due to widespread uncertainty caused by President Donald Trump’s shifting tariff policies, elevated inflation, and the spread of artificial intelligence, which could alter or even replace some jobs.
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The jobs data are being closely watched on Wall Street and in Washington because they are the first clean readings on the labor market in three months. The government didn’t issue a report in October because of the six-week government shutdown, and November’s data was distorted by the closure, which lasted until Nov. 12.
Still, December’s report caps a year of sluggish hiring, particularly after “liberation day” in April when President Donald Trump imposed sweeping tariffs on dozens of countries, though many were later delayed or softened. The economy generated an average of 111,000 jobs a month in the first three months of 2025. But that pace dropped to just 11,000 in the three months ended in August, before rebounding slightly to 22,000 in November.
Most economists expect hiring will accelerate this year as growth remains solid. Yet they acknowledge there are other possibilities: Weak job gains could drag down future growth. Or the economy could keep expanding at a healthy clip, while automation and the spread of artificial intelligence reduces the need for more jobs.
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The economy generated an average of 111,000 jobs a month in the first three months of the year. But that pace dropped to just 11,000 in the three months ended in August, before rebounding slightly to 22,000 in November.
Even those figures are likely to be revised lower in February, when the government completes an annual benchmarking of the jobs figures to an actual count of jobs derived from companies' unemployment insurance filings. A preliminary estimate of that revision showed it could reduce total jobs as of March 2025 by 911,000.
Many economists are optimistic that growth will pick up in 2026, in part because Trump's tax legislation, approved last summer, should lead to outsize tax refunds this spring. If growth does accelerate, it's possible hiring may as well. At the same time, there are signs that companies are using technology and other tools to make their workers more efficient, which can spur growth without requiring more jobs.
At the same time, inflation remains elevated, eroding the value of Americans’ paychecks. Consumer prices rose 2.7% in November compared with a year ago, little changed from the beginning of the year and above the Fed’s 2% target.
