December jobs report: US economy added 50K jobs, slightly cooler than expected

The US economy saw modest job growth in December, as employers hired at a steady pace amid economic uncertainty.

The Labor Department reported on Friday that employers Adding 50,000 job opportunities In December. This number was lower than the expectations of economists polled by LSEG, who expected 60,000 jobs to be added for this month.

the Unemployment rate It fell slightly to 4.4% in December. This reading was lower than economists’ expectations of 4.5%. The decline comes after the unemployment rate was initially reported to have risen to 4.6% in November, the highest level since September 2021, although it was revised to 4.5% after the Bureau of Labor Statistics made a routine population adjustment for the latest report.

Revisions were made to payroll figures for the previous two months, with the October report revised by 68,000 from a loss of 105,000 to a loss of 173,000 jobs. While the November report was revised down by 8,000 from an increase of 64,000 to 56,000.

Combined, employment in October and November was 76,000 fewer jobs than previously reported.

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Private payrolls added 37,000 jobs in December, below LSEG’s estimate of 64,000 jobs.

government payrolls rose by 13,000 jobs in December, with gains in local government (+18,000) and federal government (+2,000) partially offset by lower state government hiring (-7,000).

The manufacturing sector lost 8,000 jobs in December, a sharp decline from the 5,000 job losses estimated by LSEG economists.

The private sector added 41,000 jobs less than expected in December

Food services and drinking establishments added 27,000 jobs in December, up from an average of 12,000 jobs added per month in 2025.

Healthcare companies continued to add jobs in December, with an increase of 21,000 jobs for the month led by hospital hiring (+16,000). Jobs added per month in the healthcare sector averaged 34,000 jobs per month in 2025, lower than the average of 56,000 jobs in 2024.

Social assistance companies added 17,000 jobs in December, mostly in individual and family services (+13,000).

Retail companies lost 25,000 jobs in December, with declines at warehouse clubs, supercenters and general merchandise retailers (-19,000) and food and beverage retailers (-9,000) partially offset by gains among electronics and appliance retailers (+5,000).

The retail sector lost 25,000 jobs in December. (Allen J. Chapin/Los Angeles Times via Getty Images/Getty Images)

The labor force participation rate was little changed in December at 62.4%, after remaining relatively flat throughout 2025.

The number of people working part-time for economic reasons reached 5.3 million in December after rising by 980,000 over the course of 2025. These individuals would have preferred to work full-time but were working part-time because their hours were reduced, or because they could not find full-time jobs.

The number of long-term unemployed, defined as those who have been out of work for 27 weeks or more, was little changed in December at 1.9 million – although the number rose by 397,000 last year. The long-term unemployed represented 26% of the total unemployed in December.

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“Today’s report confirms what we believe has been clear for some time: that the labor market is no longer working in favor of job seekers,” said Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management. “Until the data provides clearer direction, a divided Fed is likely to remain that way. Interest rates are likely to fall this year, but markets may have to be patient.”

“The prospect of a Fed rate cut in January has all but disappeared following the unexpected decline in the unemployment rate,” said Seema Shah, chief global strategist at Principal Asset Management.

“It is now difficult to say that the labor market is collapsing and in dire need of monetary support. However, the picture is still far from clear: salary growth is below expectations and downward revisions of the previous months have pushed the three-month moving average into negative territory,” Shah added. “The US economy will likely need additional support from the Fed – but not right away.”

Markets reacted to the jobs data by reinforcing the view that the Fed will leave the benchmark federal funds rate unchanged when it holds its next policy meeting at the end of the month.

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The CME FedWatch tool shows a 97.2% probability that the Fed will leave interest rates at the current target range of 3.5% to 3.75%, up from 88.9% the day before.

The tool also shows a 69.1% probability of interest rates remaining unchanged during the Fed’s March meeting, with those odds up from 57.5% yesterday.