NY Times - Employers continued to hire at a modest pace in December and the unemployment rate declined, according to federal data released on Friday after interruptions resulting from the government shutdown.
Employers added 50,000 jobs in the last month of 2025 and the unemployment rate fell to 4.4 percent, the data showed. For the full year, U.S. employment growth in 2025 was the weakest since the recession in 2020.
Average hourly earnings grew at a 0.3 percent pace on a monthly basis in December, and 3.8 percent on an annual basis, an acceleration compared with the trend of previous months....
The job market has deteriorated over the past year for new graduates and others who are looking for work. And yet, nearly every week, data on new jobless claims across all 50 states has shown that firings remain low.
The unemployment rate inched up throughout 2025. Still, the labor force participation rate for people in their prime working years, between age 24 and 65, remains at a relatively solid 80.7 percent.
Health care and social assistance continued to lead the way for payrolls growth. There were 27,000 job gains for the month in food services and drinking places. Health care employment rose by 21,000. Job growth in most other industries, however, was mild, generally a sign of sluggishness in the business cycle. Retail, for instance, lost 25,000 jobs in December.
With revisions to previous months, employment gains in October and November were 76,000 lower than previously reported. A report from Oxford Economics, a research firm, noted that, after Trump administration’s monthslong cuts to the federal work force, “net job losses among federal workers were minimal, and we think the wave of federal job losses is behind us.”
Employment in the manufacturing sector dropped by roughly 8,000 jobs last month, and has fallen to about 484,000 jobs in December 2025 from 542,000 in December 2024, despite President Trump’s promises that tariffs would lead to a boom in re-shoring American factory employment.
The persistence of a low overall unemployment rate is a relief for those who were previously worried about a recession, but doesn’t amount to what many think of as a good job market. For those without a job, finding another is proving more difficult. Guy Berger, the director of economic research at the Burning Glass Institute, noted that the rate of hiring is around the pace it was from 2010 to 2011, “when the unemployment rate was north of 9 percent.”
Markets have expected Federal Reserve officials to keep interest rates at current levels when they meet later this month. This latest insight into the nation’s employment situation will add to their intense deliberations over whether to cut rates to bolster the economy or keep them steady to ward off inflation. For now, traders expect the Fed to keep rates unchanged.
Even amid concerns about labor market weakness, the latest numbers on growth remain strong. Gross domestic product, the standard measure of total economic activity, grew at a 4.3 percent annualized pace in the third quarter, and productivity (business output per employee) grew by 4.9 percent.
Most analysts expect that this momentum moderated in the last three months of 2025. But they still expect growth in the $30 trillion U.S. economy will register a respectable pace in 2026 — above 2 percent — even as serious concerns about housing affordability and the general cost of living persist.
