Hiring ticked down in December, defying the Federal Reserve’s effort to boost hiring with a recent series of interest rate cuts, a jobs report on Friday showed. The reading fell short of economists’ expectations.<\/p>\n
The U.S. added 50,000 jobs in December, which marked a slight drop from 64,000 jobs added in the previous month.<\/p>\n
The unemployment rate dropped to 4.4% in December from 4.6% in November, the Bureau of Labor Statistics (BLS) said. Unemployment remains low by historical standards but had ticked up from previous lows.<\/p>\n
The fresh data comes two weeks after a blockbuster report on economic growth appeared to rebuke<\/a> worries about the wider economy.<\/p>\n Hiring slowed sharply over the latter half of 2025, stoking concern<\/a> among some economists about a possible economic slowdown.<\/p>\n However, the better-than-expected December report defied concerns about gross domestic product raised by the labor market.<\/p>\n The U.S. economy grew at a robust annualized rate of 4.3% in the third quarter in the government’s initial estimate, marking an acceleration from 3.8% growth recorded in the previous quarter, the U.S. Commerce Department<\/a> said in December.<\/p>\n A boost in consumer spending helped propel the economic surge, the department added, suggesting that many consumers continued to open their wallets even as their attitudes worsened.<\/p>\n Meanwhile, inflation dropped<\/a> in November, the most recent month for which data is available. The cooldown ended a monthslong acceleration of price increases and offered some relief for households strained by cost hikes.<\/p>\n Inflation remains well below a 2022 peak but stands nearly a percentage point above the Fed’s target of 2%.<\/p>\n The onset of elevated inflation alongside sluggish hiring has put the Fed in a difficult position.<\/p>\n The central bank must balance a dual mandate to keep inflation under control and maximize employment. To address pressure on both of its goals, the Fed primarily holds a single tool: interest rates.<\/p>\n Starting in September, the Fed cut interest rates at three consecutive meetings, opting to address the flagging labor market. The benchmark rate stands at a level between 3.5% and 3.75%.<\/p>\n That figure marks a significant drop from a recent peak attained in 2023, but borrowing costs remain well above a 0% rate established at the outset of the COVID-19 pandemic.<\/p>\n Futures markets expect two quarter-point interest rate cuts this year, forecasting the first in April and a second in the fall, according to CME FedWatch Tool<\/a>, a measure of market sentiment.<\/p>\n After the Fed’s most recent rate cut in December, Fed Chair Jerome Powell suggested the central bank may be cautious about further rate reductions.<\/p>\n