What we covered here
• The US economy added just 50,000 jobs in December, according to the latest monthly report from the Bureau of Labor Statistics.
• The unemployment rate ticked down to 4.4% from a revised 4.5%.
• The latest data means 2025 saw the weakest annual job growth since 2003, with just 584,000 jobs added last year.
• While the Federal Reserve cut rates three times last year in order to support a flailing labor market, December’s improved unemployment rate makes an interest rate cut unlikely at the central bank’s rate-setting meeting later this month.
Our live coverage of the December jobs report has ended. For more, please click here.
US stocks set for best week since November
Stocks are having a strong start to the year. The Dow, S&P 500 and Nasdaq Composite are each on pace for their best week since November.
The Dow on Friday afternoon was up 227 points, or 0.46%, putting it on track for a gain of 2.3% on the week.
The S&P 500 rose 0.71% and the Nasdaq rose 0.93%, putting them on track for weekly gains of 1.64% and 1.99%, respectively.
Those weekly gains would be the three indices’ best since the last week of November. Trading for the week closes at 4 p.m. ET.
José Torres, senior economist at Interactive Brokers, said investor sentiment strengthened Friday because the tick-down in the unemployment rate in December was a positive development for the economy.
Market sentiment on Friday was “neutral,” according to CNN’s Fear and Greed Index. Wall Street’s fear gauge, the VIX, fell 6%, reflecting the relative calm.
“In a situation like this, the Fed has latitude to manage the economy cautiously,” said Robert Tipp, head of global bonds at PGIM Fixed Income. “It doesn’t have to panic and cut rates without regard to the above-target rate of inflation.”
Investors next week will be focused on corporate earnings results for the fourth quarter of 2025, in addition to an inflation report for December set to be released on Tuesday.
2025 was an especially tough year for job seekers
Last year was one of the roughest years for job seekers in decades, outside of recessions, according to the December jobs report released Friday.
The report showed employers hired 50,000 new workers last month, bringing the average monthly job gains for 2025 to around 49,000, a 70% decline from last year’s average monthly gains of 168,000.
Trump shared jobs data ahead of schedule. Why that matters so much
President Donald Trump seemingly violated protocol Thursday evening when he posted on social media some data included in Friday’s embargoed jobs report.
While Trump didn’t directly reveal the headline number of job gains, the chart he shared, which included private and public sector “since January,” ended up matching the figures later revealed to the general public.
Presidents and select members of their administration get job reports ahead of their general release. Because financial markets are so sensitive to monthly job reports, extra precautions are supposed to be taken to ensure word doesn’t get out early. If it does, individual investors can trade on that and profit handsomely off it.
The Office of Management and Budget prohibits people who get early access to jobs data from making public statements about jobs data until 30 minutes after it’s released to the general public to allow them time to draw their own conclusions.
“Following the regular procedure of presidents being prebriefed on economic data releases, there was an inadvertent public disclosure of aggregate data that was partially derived from pre-released information,” a White House official told CNN. “The White House is accordingly reviewing protocols regarding economic data releases.”
Thursday’s post by Trump isn’t out of the ordinary. The president in his first term also gave an early nod to a jobs report before it was released. However, he didn’t share any figures.
This post has been updated with comment from the White House.
The number of federal workers fell by 9% last year, one of the biggest losses by sector
It wasn’t a great year of jobs creation across most industries. However, for the federal government, it was one of the worst employment years on record.
The federal workforce – a favorite punching bag of President Donald Trump, whose Department of Government Efficiency initiative cut jobs and spending –saw its ranks slashed by 274,000 workers, or 9%, in 2025, according to Bureau of Labor Statistics data.
Only the post-World War II demobilization years of 1945 to 1947 and President Dwight D. Eisenhower’s sweeping federal cutbacks in 1953 saw greater shares of reductions, a review of BLS data shows.
This time around, the bulk of the federal job losses came in October, when 179,000 jobs dropped off the government payrolls as a result of the DOGE-driven “fork in the road” buyouts that took effect on September 30, according to BLS data.
While the federal government accounted for the biggest job losses and state government employment dipped by 45,000 jobs (or 0.8%), local governments – a longstanding driver of US public sector gains – continued to add jobs. Their employment rose by 170,000 jobs, or 1.1%.
What a weak jobs market means for Americans' finances
Last year was particularly rough for job seekers, with employers pulling back on hiring and, in some cases, resorting to layoffs, in part because of economic uncertainty resulting from President Donald Trump’s erratic trade policy.
The weaker job market has serious implications for the overall American economy because of the direct hit it can have to consumers’ wallets. Already, Americans’ wages didn’t stretch as far last year compared to previous years, with pay gains slowing and inflation picking up.
Surveys show Americans are putting off big purchases due to job security fears. Given that consumer spending supports around two-thirds of the US economy, employers may have to lay off more workers if people pull back on their purchases.
On the wage front, when jobs are not plentiful, employers no longer need to offer higher compensation in order to attract workers. That lower income makes it harder for workers to afford goods and make on-time payments for mortgages, which could have dire implications for households and the economy at large.
Here's what Wall Street is saying about the jobs report
Investors are digesting the December jobs report and looking for insights about the health of the US economy and the outlook for the Federal Reserve.
Stocks were modestly higher Friday morning: The Dow was up 138 points, or 0.28%. The S&P 500 rose 0.49%, and the tech-heavy Nasdaq gained 0.65%.
Here’s what investors, economists and strategists are saying:
- “A 50k increase in December nonfarm payrolls is close enough to consensus to satisfy markets.” — Jennifer Timmerman, senior investment strategy analyst at Wells Fargo Investment Institute. “Investors focused on an unexpected decline in the unemployment rate, to 4.4%, in sending stock prices higher.”
- “The December jobs report was so-so, capping a disappointing year for the US job market.” — Bill Adams, chief economist at Comerica Bank. “Headwinds from tariffs, DOGE cuts, weakness in housing and AI adoption weighed on job growth last year.”
- “Overall, it’s a mixed report.” — Angelo Kourkafas, senior global investment strategist at Edward Jones. “Not weak enough to derail the Fed’s pause signal, but not strong enough to remove its rate-cutting bias. Slow, gradual cuts remain our base case for 2026.”
- “The picture remains far from clear: payroll growth undershot expectations, and downward revisions to prior months have pushed the three-month moving average into negative territory.” — Seema Shah, chief global strategist at Principal Asset Management. “The US economy likely requires additional support from the Fed — just not immediately.”
- “Today’s report confirms what we think has been evident for some time — the labor market is no longer working in favor of job seekers.” — Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management. “Until the data provide a clearer direction, a divided Fed is likely to stay that way. Lower rates are likely coming this year, but the markets may have to be patient.”
US productivity surged to a two-year high in the third quarter
American workers’ productivity surged in the third quarter to its strongest pace in two years, in a sign that strong economic growth didn’t stoke inflation in the second half of 2025.
US labor productivity, measured as nonfarm employee output per hour, rose at an annualized rate of 4.9% in the July-through-September period, the Labor Department reported Thursday, picking up from the prior quarter’s 4.1% rate. That was the fastest pace since the 5.2% rate in the third quarter of 2023.
In the third quarter, both productivity and economic growth were robust. The US economy expanded at a 4.3% annualized rate in July through September, which, like productivity, was also the fastest pace in two years. Resilient consumer spending and higher net exports boosted third-quarter GDP.
Last year’s strong productivity “reflects the payoff from a multi-year effort to streamline talent needs, automate processes, and operationalize efficiency,” Gregory Daco, chief economist at EY-Parthenon, wrote in analyst note.
He added that productivity growth was “not primarily driven by AI – yet.”
“The objective has been strategic resilience in an increasingly volatile geoeconomic environment, and structural robustness amid continuous supply shocks from trade and industrial policy, immigration shifts, demographic constraints, geopolitical disruptions, and an AI-driven technological transition,” Daco said.
Weaker payroll growth underscores need for housing affordability
The weaker hiring environment amplifies the issue of housing affordability for Americans.
President Donald Trump announced plans this week to address the frozen housing market. On Thursday, he said he had directed Freddie Mac and Fannie Mae to buy up $200 billion in mortgage bonds. And on Wednesday, he said he intends to ban large institutional investors from buying additional single-family homes.
“I am immediately taking steps to ban large institutional investors from buying more single-family homes, and I will be calling on Congress to codify it. People live in homes, not corporations,” Trump wrote in a post on social media.
Large institutional investors such as Blackstone, JPMorgan Chase, and other banks and investment firms have increasingly snapped up family homes in recent years, eyeing rising returns on home prices. These investors often buy and rent out homes, and their presence grew after the foreclosure wave during the Great Recession in 2008, particularly in the Sun Belt states.
Trump said he plans to outline further housing and affordability proposals in the coming weeks, noting: “I will discuss this topic, including further Housing and Affordability proposals, and more, at my speech in Davos in two weeks.”
Trump is scheduled to deliver an address at the World Economic Forum later this month in Davos, Switzerland.
The cost of buying a home in the United States has surged in recent years, largely because of a housing market that has remained historically stuck due to low inventory, combined with mortgage rates north of 6%.
Consumer sentiment rose this month to its highest reading since September
Americans felt better about the US economy early this month, specifically those on the lower end of the income spectrum, as worries about President Donald Trump’s expansive tariffs eased.
The University of Michigan’s latest consumer survey, released Friday, showed that sentiment increased in January for the second consecutive month, to a preliminary reading of 54, up from December’s 52.9. There will be a revised, final reading for January later this month.
“Improvements in January were seen among lower-income consumers, while sentiment fell for those with higher incomes,” Joanne Hsu, the surveys director, said in a release. “Although consumers’ worries about tariffs appear to be gradually receding, they remain guarded about the overall strength of business conditions and labor markets.”
Sentiment remains at historically weak levels, but it likely does not mean much for consumer spending, which accounts for about two-thirds of US economic output. Episodes of declining sentiment in recent years did not translate to weaker spending.
While the US economy has weathered intense uncertainty spurred by Trump’s sweeping economic agenda, higher-income consumers haven’t cut back. The diverging fortunes between the lowest and highest earners in America has emerged as a key issue for voters across the country.
Hsu added that “more than 90% of interviews for this release were collected prior to the capture of [then-President Nicolás] Maduro in Venezuela.”
Supreme Court not issuing ruling in landmark tariff case today
While traders were all but guaranteed a jobs report on Friday, there was also widespread speculation that the Supreme Court would issue a verdict on the legality of President Donald Trump’s sweeping tariffs. But that didn’t end up happening, as the Supreme Court announced just one verdict Friday, in a different case.
The landmark tariff case revolves around a novel approach Trump used that has brought in $130 billion in revenue as of December 14, according to US Customs and Border Protection data. If the justices find Trump lacked the legal authority to impose them, businesses could be due refunds. However, it’s unlikely to be a straightforward or quick process.
And while Trump wouldn’t be able to continue to impose these particular tariffs, if deemed illegal, he has plenty of other tariffs he can immediately enact.
University of Central Florida economist Sean Snaith in a note on Friday that the Supreme Court’s eventual ruling in this case could “flip the apple cart” with regard to businesses’ hiring plans.
“If the current framework is overturned, we’re right back to the kind of trade uncertainty that can weigh on growth and business decisions,” he said.
This post has been updated with the latest news from the Supreme Court.
Stocks open higher as data shows unemployment rate ticked down
Stocks opened higher Friday as investors digested the latest data on the US labor market.
The Dow rose 171 points, or 0.35%. The S&P 500 gained 0.2%. The tech-heavy Nasdaq Composite edged higher but was relatively flat.
The US economy added 50,000 jobs in December, according to data published this morning by the Bureau of Labor Statistics. The payrolls number was slightly below economists’ forecasts for 55,000 jobs, but the unemployment rate ticked down to 4.4% from a revised 4.5% in November.
Traders are now pricing in just a 5% chance that the Federal Reserve cuts interest rates at its policy meeting later this month, according to CME FedWatch. That’s down from a roughly 14% chance earlier this morning and 22% chance one month ago.
“The prospect of a January Fed rate cut has all but vanished following the unexpected drop in the unemployment rate,” Seema Shah, chief global strategist at Principal Asset Management, said in a note.
Stocks moved higher as the tick-down in the unemployment rate could ease concerns about an economic slowdown, according to José Torres, senior economist at Interactive Brokers.
Market sentiment on Friday was “neutral,” according to CNN’s Fear and Greed Index.
“The stock market is likely to remain cautiously optimistic this year, but upside will be capped until confidence in the underlying job market — and therefore the longevity of this economic expansion — comes back,” Chris Zaccarelli, CIO at Northlight Asset Management, said in a note.
What the latest employment figures mean for the Fed
The government’s latest employment figures did not make a case for a January interest rate cut.
The Bureau of Labor Statistics on Friday reported that employers added 50,000 jobs in December as the unemployment declined to 4.4% from a revised 4.5%.
Shortly after, the odds of the Fed holding interest rates steady this month rose to roughly 97% from about 88%, according to the CME FedWatch Tool.
A significantly worse-than-expected December jobs report, showing a large uptick in the unemployment rate, would likely have moved the needle in favor of another rate cut this month.
Fed officials, including Chair Jerome Powell, have signaled that there is a high bar for rate cuts in 2026, after central bankers lowered rates three times in the second half of last year.
Trump's tariffs could lower inflation but raise unemployment, San Francisco Fed researchers argue
Almost 85% of the job gains for 2025 happened by April, said Heather Long, chief economist at Navy Federal Credit Union. “There was little hiring the rest of the year,” she wrote in commentary issued Friday.
That’s notable since April was the month that President Donald Trump introduced his aggressive tariffs on global trading partners. However, throughout the year, Trump watered down and delayed those levies.
New research on tariffs offers a contrarian take on the potential effects of President Donald Trump’s aggressive trade policy on inflation.
Researchers at the Federal Reserve Bank of San Francisco examined economic data during massive changes in tariffs before World War II, similar to last year’s trade moves, and found that those tariff hikes “raised unemployment and reduced both economic activity and inflation.”
Economists have widely argued that Trump’s tariffs will likely push up inflation to some extent. Inflation crept up gradually last year, but it was far from the worst-case scenario economists warned about last spring.
The San Francisco Fed paper examined the economic effects of major tariff episodes since 1870, such as the Tariff Act of 1890, known as the McKinley tariffs. They argued that “a temporary tariff increase leads to a rise in unemployment and a decline in inflation that both last up to two years after the initial shock before becoming statistically insignificant.”
Just a few industries continued to drive job growth last month
The same few industries that drove job growth throughout 2025 continued to do so in December.
Employers in leisure and hospitality added 47,000 jobs in December, the most of any industry, with restaurants and bars contributing more than half of those gains. Despite persistent pessimism about the economy, Americans haven’t cut back on eating out, which has helped keep hospitality businesses afloat.
Health care businesses also added jobs throughout last year in a continuation of a yearslong trend, largely due to America’s aging population. In December, employment in the health care industry expanded by 21,000 jobs, with about three-fourths of those jobs at hospitals.
Retail employers lost the most jobs last month, shrinking by 25,000. Meanwhile, the manufacturing industry shed jobs in December for the eighth consecutive month. In early 2025, President Donald Trump said he would revive American manufacturing.
The US economy added just 50,000 jobs last month
Hiring slowed at the end of last year, as employers added an estimated 50,000 jobs in December and the unemployment rate dipped to 4.4%, according to Bureau of Labor Statistics data released Friday.
December’s estimated job gains, which are subject to revision, capped off what was a sluggish year for the US labor market.
2025 was the weakest year of employment growth outside of recession years since 2003, BLS data shows.
The labor market, which was already slowing heading into 2025, cooled sharply as hiring stalled out across most industries, a pullback economists attributed to high uncertainty (in part due to massive shifts in trade and immigration policy) as well as stubborn inflation and high interest rates.
Economists were expecting a net gain of 55,000 jobs in December and an unemployment rate of 4.5%.
Stock futures mixed ahead of jobs report
US stocks futures were little changed Friday morning as Wall Street awaits the jobs report for December, set to be released at 8:30 a.m. ET.
Dow futures were flat. S&P 500 futures rose 0.08%. Futures tied to the Nasdaq 100 rose 0.17%.
The Dow is coming off a day in the green. The blue-chip index needs a gain of roughly 734 points, or 1.49%, to surpass the milestone of 50,000 points.
The Dow is up 2.5% so far this year, outpacing the S&P’s gain of 1.1% and the Nasdaq’s gain of 1%.
Wall Street is trying to discern the path for Federal Reserve monetary policy this year. The Fed cut interest rates three consecutive times in the fall in response to a weakening labor market.
Traders on Friday were pricing in just a 14% chance the Fed cuts rates at its policy meeting later this month, according to CME FedWatch. That’s down from a 22% chance one month ago.
“All the data right now is about what capacity the Fed will have to continue lowering interest rates this year and, more pertinently, when it will do so,” Kyle Rodda, senior financial market analyst at Capital.com, said in a note.
Also in Wall Street’s sights today: The US Supreme Court could issue a ruling on President Donald Trump’s use of an emergency powers act to implement his aggressive tariffs on global trading partners.
What to expect from the latest jobs report
Most economists expect the United States added around 55,000 jobs in the last month of 2025, underscoring how last year’s employment growth was the weakest in decades.
But seasonal factors such as the holiday hiring peak could put December’s monthly total somewhere north of 105,000, some economists say.
The unemployment rate is expected to tick down to 4.5% after hitting a four-year high of 4.6% in November, FactSet consensus estimates show. (The November rate was revised down, according to the December report, to 4.5%.)
Job gains for the entirety of 2025 are currently on track to total just 710,000, said Heather Long, chief economist at Navy Federal Credit Union, in a statement.
“That’s the worst hiring outside of a recession since 2003.”
This post has been updated to reflect breaking news from the BLS.
The number of available jobs in the US just hit its lowest level in more than a year
The number of estimated job openings fell to the lowest level in more than a year, according to the latest data from the Bureau of Labor Statistics.
Just 7.15 million positions were available at the end of November, down from 7.45 million the month before, the Job Openings and Labor Turnover Survey showed.
With the exception of retail and construction, job openings trended lower across the majority of industries.
Hiring activity trended in a similar direction. There were an estimated 5.12 million new hires in November, a drop-off from 5.37 million the month before.
Job openings are at their lowest level since September 2024, while hires are at their lowest since June of that year.
Very few industries posted net gains during November, and those gains were meek. Information added 12,000 jobs, federal government gained 11,000 and construction got a boost of 11,000 new roles.
The hiring rate (hires as a percentage of total employment) slunk back to 3.2%, matching its lowest rate in more than a decade (excluding the pandemic), BLS data showed.
Americans worry more than ever that they won't find a job, NY Fed survey shows
Americans are feeling increasingly hopeless about their employment prospects, new survey data showed Thursday.
The perceived probability of finding a job hit a record low of 43.1% in December, according to the Federal Reserve Bank of New York’s latest Survey of Consumer Expectations, a closely watched survey that has been running since 2013.
Additionally, respondents’ mean probability of losing a job shot higher in December to 15.2%, the highest rate since April 2025, while the probability of voluntarily leaving a job fell for the third consecutive month to the lowest rate since July 2023.
US employers’ hiring activity has slumped to recession-era levels in recent months. Economists have attributed this to high uncertainty (in part due to massive shifts in trade and immigration policy) that has paralyzed much business investment.
Still, there were some bright spots in the December survey data, particularly respondents’ outlooks for their household finances: The share of respondents who said they expect their financial situation to be somewhat or much better off for the coming year was the highest seen in 10 months.
