Weak Hiring in December Ends a Lackluster Year for the U.S. Labor Market

SadaNews - Limited job gains are expected to be recorded in the United States in December, concluding one of the weakest years for employment growth since 2009.

Economists predict an addition of nearly 60,000 jobs during the month, according to the average forecast from a Bloomberg survey ahead of the Labor Department's data release on Friday. This would raise the total increase in payrolls for 2025 to about 670,000, a significantly lower level than the two million jobs added in 2024. The unemployment rate is also expected to have fallen to 4.5% in December from its highest level in four years.

Slowing Hiring Pace in 2025

After years of frantic efforts to attract workers, employers have slowed their hiring pace in 2025. The stability in the number of job openings indicates that many companies are now satisfied with their staffing levels, while a wave of government trade policy announcements has also prompted firms to focus on cost-cutting and proceed cautiously with any additional hiring.

The rapid expansion of artificial intelligence adoption may be a constraining factor on payroll growth as companies seek to enhance productivity. However, despite the slowdown in hiring, there are not many indications of widespread layoffs either.

This helps explain why expectations are for the Federal Reserve to exercise caution regarding continued monetary easing at the beginning of 2026, following three consecutive interest rate cuts at the end of 2025, while awaiting further progress in lowering inflation.

Opinion of Bloomberg Economics Experts: "We believe that the decoupling of GDP growth from labor market indicators will continue into 2026. Inflation is expected to decrease, and eventually, the Fed will cut interest rates by 100 basis points over the next year."

-Anna Wong, Stuart Paul, Eliza Winger, Chris G. Collins, Troy Davig, and Alex Tanzi, Economists

In addition to the December jobs report, the Labor Department will release November data on job openings, quits, and layoffs on Wednesday. The December surveys from the Institute for Supply Management for the manufacturing and services sectors will also provide indicators regarding employment in these sectors.