The U.S. economy ended 2025 with a steadier labor market than many feared, easing worries about mounting job losses that dominated late summer and the early weeks of the fourth quarter.
Nonfarm payrolls increased by 50,000 in December, mostly unchanged from November's downwardly revised 56,000 gain and slightly below expectations for 60,000, according to the Bureau of Labor Statistics on Friday.
October payrolls were revised down by 68,000, with job losses deepening from 105,000 to 173,000.
The unemployment rate slipped from a downwardly revised 4.5% in November to 4.4%, landing below expectations of 4.5%.
Wage growth also picked up. Average hourly earnings rose 0.3% on the month, accelerating from November's 0.2% increase and matching forecasts. On an annual basis, wages rose by 3.8%, up from November’s 3.5% and above estimates of 3.6%.
Overall, payroll employment rose by 584,000 in 2025, averaging 49,000 jobs per month. That marked a sharp slowdown from 2024, when employment rose by 2.0 million, or 168,000 per month.
Where Were Jobs Created?
Job gains remained concentrated in services.
Employment in food services and drinking places increased by 27,000 in December. The sector added an average of 12,000 jobs per month in 2025, roughly in line with 2024's pace.
Health care employment rose by 21,000, including a 16,000 gain in hospitals. Health care added an average of 34,000 jobs per month in 2025, down from 56,000 in 2024.
Social assistance payrolls increased by 17,000, driven mainly by individual and family services, which added 13,000 jobs.
Retail trade moved in the opposite direction. The sector lost 25,000 jobs in December, with declines in warehouse clubs, supercenters, and general merchandise retailers totaling 19,000. Food and beverage retailers shed 9,000 jobs, while electronics and appliance stores added 5,000.
Federal government employment was little changed, rising by 2,000 in December. Since peaking in January, federal employment has fallen by 277,000, a decline of 9.2%, according to the data.
Market Reactions
Futures on major U.S. equity indices positively reacted to the December jobs data, with contracts on the S&P 500 rising 0.5% to 6,950 points during premarket trading in New York.
Contracts on the tech-heavy Nasdaq 100 slightly outperformed, up 0.6%.
Within premarket movers, Vistra Corp. (NYSE:VST) jumped 17% after signing a 20-year deal with Meta Platforms Inc. (NASDAQ:META) to supply more than 2,600 megawatts of zero-carbon power from nuclear plants in Ohio and Pennsylvania, while peer Constellation Energy Corp. (NASDAQ:CEG) gained nearly 5%.
