Introduction
US employers added just 50,000 jobs in December, well below expectations and capping one of the weakest years for hiring since the global financial crisis, according to data from the Bureau of Labor Statistics. The result confirms a year-long slowdown characterised by cautious hiring and limited layoffs, with payroll growth revised lower for the previous two months.
Despite softer hiring, the unemployment rate edged down to 4.4%, reflecting fewer job losses and a decline in labour force participation rather than stronger demand for workers. Participation slipped to 62.4%, while prime-age participation was steady. The labour market continues to exhibit a “low-hire, low fire” dynamic: businesses are reluctant to expand headcount but are also holding onto staff.
Job gains remained concentrated in healthcare and leisure and hospitality, while employment fell in retail, construction and manufacturing. Manufacturing has now recorded eight consecutive months of job losses, underscoring ongoing weakness linked to trade uncertainty and tariffs. Federal government employment also declined sharply over 2025 following workforce cuts, reversing its prior role as a source of job growth. Wage growth remained moderate, with average hourly earnings rising 0.3% in December and 3.8% over the year—firm but not inflationary. However, signs of labour market strain are building beneath the surface: long-term unemployment rose by nearly 400,000 over 2025, part-time employment for economic reasons increased sharply, and average weekly hours edged lower.
