Key Takeaways
The U.S. economy added 50,000 jobs in December, below expectations and fewer than the 56,000 in November.
The unemployment rate fell to 4.4% from 4.5%, below expectations for 4.5%.
Overall, the report showed the job market stayed in a low hiring, low firing limbo.

The job market improved by one measure but stayed relatively slow in December.

U.S. employers added 50,000 jobs in December and the unemployment rate edged down to 4.4% from a downwardly-revised 4.5% in November, the Bureau of Labor Statistics said Friday. The relatively slow job growth was slightly below the downwardly-revised 56,000 added in November, and was less than the 73,000 jobs forecasters had expected. Additionally, the unemployment rate was lower than the 4.5% forecast according to a survey of economists by Dow Jones Newswires and The Wall Street Journal.

The unemployment rate fell for the first time since June, halting its recent upward trend. A downward revision lowered it to 4.5% instead of 4.6% in November as well. The rate in December was the same as September, although higher than the 4% unemployment rate at the beginning of the year.

Why This Matters

The lower-than-expected unemployment rate could ease the fears of officials on the Federal Reserve that the job market is in imminent danger of collapsing, and encourage them to hold rates steady in January.

The slow job growth and elevated unemployment rate continued to show the effects of President Donald Trump’s economic policies, especially tariffs, which have discouraged hiring, and his crackdown on immigration, which has reduced the number of available workers. Job growth has slowed down significantly after averaging 147,000 workers per month through April of last year, when Trump announced his far-reaching “Liberation Day” tariffs on nearly every U.S. trading partner.

“Today’s messy report helps level-set expectations for 2026 for a low-hire, low-fire labor market that is still waiting for clearer signs of renewed momentum,” Jake Krimmel, senior economist at Realtor.com, wrote in a commentary.

Job growth in the previous months was lower than previously thought: the bureau revised its job growth estimates for October and November by 76,000 total. The job market was shaken up in those months by the record-long government shutdown.

Officials at the Federal Reserve have cut the central bank’s interest rate by three-quarters of a point since September in an effort to boost hiring and prevent the labor slowdown from becoming a wave of mass layoffs. Policymakers are slated to meet Jan. 27 and 29 to set monetary policy, and will likely scrutinize Friday’s report when deciding whether to cut interest rates again.

The dip in the unemployment rate could encourage Fed officials to keep the rate steady. Odds for a January rate cut fell to 5% from 11% on Thursday according to the CME Group’s FedWatch tool, which forecasts rate movements based on fed funds futures trading data.

A Bad Year For Jobs, Especially Manufacturing

The manufacturing sector lost 8,000 jobs in December, the eighth month straight of job losses. The downturn is especially significant because Trump’s tariffs, introduced eight months ago, were specifically intended to boost American manufacturing employment by protecting industry from overseas competition.

As it stands, 2025 was one of the worst years for job growth in decades. The economy added just 584,000 jobs the entire year, the fewest since 2003, excluding the Great Recession and the COVID-19 recession. What’s more, economists expect that number to drop significantly or turn negative after the BLS makes its backwards-looking revisions next year to incorporate more up-to-date data.

“While jobs growth has not deteriorated solidly into negative territory, the fizzling of jobs growth to end 2025 dampens some hope that jobs growth was rebounding after a sluggish summer on the back of strong consumer spending,” Daniel Zhao, chief economist at job site Glassdoor, wrote in a commentary.