The US labour market closed 2025 on a mixed note, with December job creation undershooting expectations even as the unemployment rate unexpectedly declined, according to data released on Friday by the Bureau of Labor Statistics (BLS).
Nonfarm payrolls rose by a seasonally adjusted 50,000 in December, below the downwardly revised 56,000 in November and well short of the Dow Jones estimate of 73,000. The report offered a muddy picture, with businesses reporting subdued hiring while household data showed employment gains.
Revisions further weighed on sentiment. November payrolls were revised down by 8,000, while October job losses deepened sharply to 173,000, compared with the earlier estimate of 105,000.
Despite weaker hiring, the unemployment rate fell to 4.4%, defying expectations of 4.5% and improving from 4.6% in November. For 2025 as a whole, payroll growth averaged 49,000 jobs per month, sharply lower than 168,000 in 2024.
Federal Reserve officials continue to track labour data closely for clues on interest rates. While markets expect the Fed to remain on hold after three rate cuts late last year, economic momentum remains firm. The Atlanta Fed’s GDPNow model points to 5.4% annualised growth in Q4, following 4.3% growth in Q3.
Consumer spending also stayed robust, with online holiday sales rising 6.8% year-on-year to a record $257.8 billion, according to Adobe.
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Markets are not pricing in the next rate cut until June, though expectations could shift as investors digest the latest labour market signals.
