Tepid December and big downward revisions in Q4 wrap up a bad 2025 for US job market

Jobs Friday is finally back on schedule after its delays due to the government shutdown in October and November. And this report indicates that December was in line with a jobs market that slowed significantly in 2025.

The U.S. labor market ended 2025 on a soft note, with job creation in December less than expected, according to a report Friday from the Bureau of Labor Statistics.

Nonfarm payrolls rose a seasonally adjusted 50,000 for the month, lower than the downwardly revised 56,000 in November and short of the Dow Jones estimate for 73,000.

At the same time, the unemployment rate fell to 4.4%, compared with the forecast for 4.5%.

Not mentioned in that decline in the unemployment rate is that it followed a 0.4% increase in that rate between June and November, and that unemployment had gone from 4.0% in January to 4.5% in November. And that the percentage of working-age people listed as employed is at its lowest non-COVID levels in a decade.

And if you dig into the actual jobs report, you'll see that an increasing amount of those "employed" aren't working as much as they wish they were.

The number of people employed part time for economic reasons, at 5.3 million, changed little in December but is up by 980,000 over the year. These individuals would have preferred full-time employment but were working part time because their hours had been reduced or they were unable to find full-time jobs.

The number of people not in the labor force who currently want a job was little changed at 6.2 million in December but is up by 684,000 over the year. These individuals were not counted as unemployed because they were not actively looking for work during the 4 weeks preceding the survey or were unavailable to take a job.

On the payrolls side, the real news wasn't as much that only 50,000 jobs were added in December, as much as how additonal data for previous months showed job growth was much worse than the already-subpar numbers had indicated.

The change in total nonfarm payroll employment for October was revised down by 68,000, from -105,000 to -173,000, and the change for November was revised down by 8,000, from +64,000 to +56,000. With these revisions, employment in October and November combined is 76,000 lower than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.)

While that October loss of 173,000 jobs is mainly a reflection of federal employees having their severance run out on Sept 30 after being DOGE'd and Voughted throughout the year (federal jobs were -179,000 in October), the private sector also had its October job growth revised down from 52,000 to 1,000. Those negative private sector revisions for October included previously growing sectors like construction (revised down -12,000), retail trade (revised by -21,500) and health care (revised by -13,200).

You put together the 3 months of Q4 2025, and they only had a total 88,000 private sector jobs added. Along with a 3-month stretch from June-Aug 2025 of 39,000 total jobs, we'r seeing the worst non-COVID run of job growth in the private sector since early 2010 - when we were dragging ourselves out of the Great Recession.

Put it together, and 2025 shows a significant dropoff from what we were seeing in the 2 years before Donald Trump's 2nd term in office began.

And while wage growth may seem OK on the overall level, everyday line workers saw their wages barely budge at the end of 2025.

In December, average hourly earnings for all employees on private nonfarm payrolls rose by 12 cents, or 0.3 percent, to $37.02. Over the past 12 months, average hourly earnings have increased by 3.8 percent. In December, average hourly earnings of private-sector production and nonsupervisory employees, at $31.76, changed little (+3 cents).

For all of 2025, production and nonsupervisory employees only had their average hourly earnings go up by 3.55%, the lowest 12-month increase since early 2020 - a much less inflationary time.

Pretty bad picture for the US jobs market, not just for December, but for 2025 in general. And if firms continue to take all of the proceeds of worker productivity, and continue to avoid hiring and giving wage increases, how can consumer spending hold up for 2026?