The year 2025 concluded with a distinct air of caution in the United States labour market, as job growth slowed significantly towards the end. According to the latest data from the US Bureau of Labor Statistics, American employers added just 50,000 jobs in December 2025. While the unemployment rate edged down to 4.4% from 4.6% in November, this superficial progress masked underlying weaknesses of slower hiring and shrinking momentum.
A Year of Fraying Resilience
The final month's performance capped off a year that began with confidence but grew increasingly uneven. For much of early 2025, hiring appeared steady and the job market seemed resilient enough to handle higher borrowing costs and inflation. However, that narrative started to unravel by May. Growth decelerated, and subsequent data revisions began chipping away at earlier reported gains. In several instances, what were initially counted as job additions were later revised to net losses.
The December report crystallised this shift. The unemployment rate, while lower, came alongside weaker hiring. Notably, November's 4.6% rate was already the highest since September 2021. The revisions to prior months were particularly telling. October's payroll numbers were revised down sharply by 68,000 jobs, turning an initial loss of 105,000 into a deeper loss of 173,000. November's figures were also trimmed by 8,000. These adjustments collectively suggest the labour market entering the final quarter of 2025 was in a more fragile state than initially understood.
Sectoral Gains: Narrow and Concentrated
Where job creation did occur in December, it was heavily concentrated in a few specific sectors, indicating a lack of broad-based strength.
- Food Services and Drinking Places led the gains, adding 27,000 jobs, supported by sustained consumer spending on services.
- Healthcare continued its predictable climb with 21,000 new positions, a reflection of long-term structural demand rather than short-term economic confidence.
- Social Assistance added another 17,000 jobs.
Outside these pockets, the landscape was far less encouraging. Retail trade shed 25,000 jobs in December alone, ending a year already marred by store closures and restrained holiday hiring. Sectors like manufacturing, construction, and transportation showed virtually no change, signalling stagnation. The federal government added a mere 2,000 jobs in December, a negligible figure that hardly offsets the damage from earlier in the year. Since January 2025, federal employment has plummeted by 277,000 jobs, highlighting the scale of layoffs in the public sector.
Private Data Offers a Glimmer, But Annual Picture is Bleak
Private-sector data from the ADP National Employment Report provided a sliver of relief, showing that private employers added 41,000 jobs in December. While not a strong number, it indicates hiring has not completely frozen. Short-term layoff data also supported guarded optimism. According to Challenger, Gray & Christmas, US employers announced 35,553 job cuts in December 2025, the lowest level in 17 months and a sharp drop from November.
However, zooming out to the full year reveals a much more bruising reality. Employers announced approximately 1.2 million job cuts throughout 2025. This represents a staggering 58% increase compared to 2024 and marks the highest annual total since the pandemic year of 2020.
Conclusion: A Market Seeking Footing
The US labour market is not in a state of collapse, but its period of easy coasting is clearly over. Hiring has slowed, data revisions are harsher, and job growth is increasingly confined to sectors with inelastic, structural demand. For American workers, the signals are mixed: jobs exist, but mobility is harder; layoff announcements are easing in the short term, yet a sense of insecurity lingers.
As 2026 begins, the story is less about dramatic economic swings and more about underlying fragility. The market is holding together, but barely. After the turbulent journey of 2025, that may be the most honest assessment of its current state.
