Announced this morning, the economy added 50,000 jobs in December, less than expected and the previous month’s increase was revised slightly lower. In reviewing the individual industries, the Leisure and Hospitality industry was relatively strong, while the Retail Trade industry and Construction industry were relatively weak. The Unemployment Rate came in at 4.4%, less than expected and one tenth less than the previous month’s revised figure; and the Labor Force Participation Rate was 62.4%. Average Hourly Earnings increased 0.3% in December, as expected, and grew 3.8% on an annual basis. In addition, Average Weekly Hours were 34.2, which is one tenth less than the previous month.
Overall, a steady report with an increase in headline jobs, albeit less than expectations, coupled with a slight reduction in the unemployment rate. Strength in hiring was seen in leisure and hospitality, while hiring in retail trade and construction was weak considering the winter season following the holidays. The monthly wage increase was higher than the previous month and the annual rate is slightly above the 30-year average.
Given this report, the jobs market remained steady at the end of the year but weaker than it was earlier in 2025. The tick lower in the unemployment rate was notable and a small reprieve from the increases we have seen in previous months. Companies appear resistant to let workers go and to hire workers in the current environment, and the tick lower in the unemployment rate will give the Federal Reserve a lot to consider at their upcoming meeting. How the labor market unfolds in the new year will be key for the Federal Reserve and the economy in the weeks ahead.
In all, the yield on the 10-year US Treasury fluctuated following the report but is now little-changed and equity futures are higher as we head into the market open.
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