Jan. 9, 2026Updated Jan. 11, 2026, 3:28 p.m. ET
American employers added 50,000 jobs in December, falling short of some analysts’ expectations, and capping off a volatile year for the U.S. job market.
Last year was marked by relatively strong and steady job growth in the first few months, followed by noticeable cooling starting in May, with multiple months showing net job losses after revisions.
In December, the unemployment rate declined to 4.4%, down from 4.6% in November. November’s rate was the highest rate since September 2021.
Payroll gains for October were revised down by 68,000, from -105,000 to -173,000. Payroll gains for November were also revised down by 8,000, indicating the labor market was weaker at the end of 2025 than initially estimated.
The data provides “a mixed but concerning close to 2025,” according to Dustin Thackeray, CFA, partner and head of portfolio management at Crewe Advisors.
“The labor market’s resilience is being tested, and the coming months will be critical in determining whether this is a late-cycle slowdown or the prelude to something more persistent,” Thackeray told USA TODAY.
Payroll employment rose by 584,000 in 2025, down from an increase of 2 million in 2024.
Which industries are hiring?
Employment in food and drinking places drove payroll gains in December, adding 27,000 jobs. Health care continued to grow, adding 21,000, and the social assistance sector added 17,000.
On the other hand, retail trade shed 25,000 jobs in December. Capping a year characterized by mass layoffs, the federal government added 2,000 jobs. Since January 2025, federal government employment is down by 277,000.
Employment was little changed in other major industries in December, including manufacturing, construction, and transportation.
Most consumers aren’t confident they could land a job
Americans weren’t optimistic about their ability to land a job heading into 2026, according to the New York Fed’s December 2025 Survey of Consumer Expectations.
Respondents’ perceived probability of finding a job if they lost their own fell to 43.1% in December, the lowest level since the survey began in 2013. It marked the second record low in six months. In August, respondents gave themselves a 44.9% chance of finding a job if they lost their current one.
How is the job market overall?
Nongovernment reports tell a slightly more optimistic story. According to an ADP National Employment Report, private sector employers added 41,000 jobs in December.
“While the labor market still is arguably in a low-hire, low-fire mode, it does look in our data as though the worst of the slowdown could be behind us,” David Michael Tinsley, a senior economist at the Bank of America Institute, told reporters during a Jan. 7 call.
A Challenger, Gray & Christmas report for the same month found U.S.-based employers announced 35,553 job cuts, the lowest level in 17 months and down 50% from the 71,321 announced in November. In total, employers announced about 1.2 million job cuts in 2025, a 58% increase from 2024, and the highest annual total since 2020.
“The year closed with the fewest announced layoff plans all year. While December is typically slow, this coupled with higher hiring plans is a positive sign after a year of high job cutting plans,” Andy Challenger, workplace expert and chief revenue officer for Challenger, Gray & Christmas, said in a statement.
Trump posted some jobs data before its official release
On Jan. 8, the evening before the December jobs report’s official release, President Donald Trump posted a graph on Truth Social showing changes in private and government employment since 2025.
When the full report was released, it was clear to outside observers the chart Trump shared had incorporated what were then-unreleased December numbers.
Speaking to reporters at a meeting with oil executives Jan. 9, Trump said, “I don’t know if they posted them. I said, ‘Post them whenever you get a chance.’”
He continued, adding, “When people give me things, I post them.”
A White House Office of Management and Budget rule governing the release of embargoed economic data forbids executive branch employees from public discussion of the data until at least one hour after its official release. A White House official said the disclosure was inadvertent.
“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,” the White House official told Reuters. “The White House is accordingly reviewing protocols regarding economic data releases.”
A new way to track the labor market
The day before the BLS released the December jobs report, the Federal Reserve Bank of New York launched a new quarterly and monthly index it said will help guide monetary policy.
The Heise, Pearce, Weber (HPW) Labor Market Tightness Index summarizes current wage pressures and forecasts near-term wage inflation based on the quits rate and job vacancies per job seeker.
“Unlike other similar measures, the HPW Index incorporates the behavior of both unemployed and employed workers — which is important since most new hires come from other jobs rather than from unemployment,” the New York Fed said in a statement.
The labor market is considered “tight” when there are plenty of open jobs but not enough workers to fill them. When jobs are harder to come by, and workers are easier to find, the market is considered “loose.”
Workers have more power in a tight labor market, where wages tend to rise and consumer spending tends to follow. At the same time, businesses face higher labor costs, which can contribute to inflation if they pass those costs onto consumers.
As of Jan. 8, the latest index reading for November indicated that U.S. wage growth improved recently, though it – and the quits rate – is still running a little below the long-term average, according to Mike Skordeles, head of U.S. economics at Truist. He added that reentrants into the labor force might be masking the workers who lost work permits due to immigration status changes in early 2025, meaning he expects the index to decline.
Will the Fed cut rates in January?
After the Federal Reserve’s three consecutive cuts to its benchmark interest rate, most forecasters don’t expect the December jobs report to prompt another rate cut at the Federal Open Market Committee’s meeting at the end of January.
Analysts broadly predict the committee will hold off on further cuts to give prior reductions time to work their way through the economy.
The morning of Jan. 9, the CME Fed Watch tool, which tracks the likelihood for a rate move at each Fed meeting, showed an 88.4% chance the Fed would leave its rate range steady at 3.5% to 3.75%.
Seema Shah, chief global strategist at Principal Asset Management, said in a note to USA TODAY that the prospect of a January Fed rate cut “has all but vanished” following the drop in the unemployment rate.
“It is now difficult to argue that the labour market is collapsing and in urgent need of monetary support,” Shah said. “While a tighter labor supply may explain part of the dynamic, sustained job losses hardly inspire confidence. The U.S. economy likely requires additional support from the Fed — just not immediately.”
Contributing: Reuters
Reach Rachel Barber at rbarber@usatoday.com and follow her on X @rachelbarber_
(This story was updated to add new information.)