Unemployment Rate Dips Lower
Jobs Growth
In the last month of 2025, the economy added 50,000 new jobs, slightly less than the previous month, but in line with hiring activity over the past year. Overall payroll employment rose by 584,000 in 2025, with an average monthly gain of 49,000.
Top Industries
Not surprisingly, jobs growth continued in familiar segments: hospitality plus healthcare and social assistance.
Unemployment
The unemployment rate dropped from (an adjusted) 4.5% in November to 4.4% in December.
Wages
Compensation continued to trend upward, with average hourly earnings increasing by 0.3% in December, contributing to an increase of 3.8% over the past 12 months.
Work Week
There was a slight pullback in time worked in December, with a loss of 0.1 hour for an average workweek of 34.2 hours.
Temporary Job Trends
There were fewer temporary positions in December, when employment dipped by 5,700 jobs, compared to a loss of 5,400 positions in November.
What Does It All Mean?
Employment metrics for the final month of the year were very much in line with activity reported in recent months: jobs growth was modest, unemployment remained moderate. Overall, 2025 reflected a significantly cooler economy than post-pandemic trends, although compensation continued to trend positive.
Employment plummeted in 2020 in a flash and then rocketed back up starting in 2021. The frenetic pace of growth became routine, but was it sustainable? Apparently not, if 2025 is accepted as the reflection of a new reality whereby growth is slower and at a more measured pace. Based on this possible new reality, 2025 is not necessarily a disappointment or a harbinger of darker days ahead but rather a reset as the workforce reconfigures itself. This past year, retiree ranks have continued to swell, the impact of AI on traditional starter jobs has grown, and productivity initiatives have advanced operational efficiency. Add to that the fact that new business investments in manufacturing, energy, AI, and more have yet to make a significant impact on the workforce. There may simply be less demand for new positions at this time.
Following a December jobs report that contained more good news than bad, the outlook for the coming year is positive. After strong GDP growth in the third quarter, consumer spending for the holidays was high, leading to robust expectations for fourth-quarter GDP. Although hiring activity is clearly cooler than expected, with people staying put longer and fewer new opportunities surfacing, that delicate balance could change at any time. Remain vigilant and flexible. Be ready to pivot with speed and dexterity to take advantage of every high-potential market shift.
Sources: Bureau of Labor Statistics, Staffing Industry Analysts, CNBC, CNN, Reuters, The Wall Street Journal, FOX News, USA Today
