As we head into December 2025, the U.S. labor market continues to experience a lackluster expansion. Instead, it created just 50,000 jobs in that month. That small uptick would be welcome news in an otherwise sharp turn for the resurgent labor market. That marks its lowest showing since 2020, the year when job losses were most widespread during the Covid pandemic. Initially, the Labor Department reported that job gains in 2025 significantly underperformed projections. Instead, this reveals the fundamental challenges still facing the economy.
As of December 2025, the alternative, U-6 unemployment rate is still 4.4%. This drop provided some modicum of good news amidst a year of anemic job growth. Don’t let the unemployment rate fool you! At the same time, the job market has cooled considerably, as discussed recently in this blog. In 2025, the US experienced an underwhelming average of just 49,000 job gains per month. This represents an extreme drop off from 2024, when two million jobs were added per month—an impossible, historically unprecedented rate of job growth!
The U.S. job market in 2025 is nuanced and marked by continued duality. These changes are due to multiple factors, especially the change in federal policy with the administration of President Donald Trump. His administration’s initiatives, such as tariffs, an immigration crackdown, and cuts to government spending, have influenced business operations and hiring practices across multiple sectors. Employers big and small have raised alarm bells about these policies, and they could be having a chilling effect on an otherwise tepid hiring environment.
Even with predictions of a tsunami of layoffs echoing for much of the year, those fears haven’t come to pass in the way many expected. While most businesses are still adjusting to the new economic reality, they are still taking a wait-and-see stance towards growth and hiring. That deliberate approach has led to the economy’s swift rebound from the pandemic’s staggering effects. As they forge ahead, companies are certainly flying by the seat of their pants.
The December 2025 employment numbers provide an ominous glimpse of what lies ahead. The U.S. labor market will have to meet these challenges head-on, with great unanimity. As employers continue to face macroeconomic pressures and an evolving economy, the future of strong job growth is far from certain. Analysts and labor experts will watch these trends warily in the months to come. They hope to find clues as to how America’s workforce may be shaped by national policy decisions and international economic forces.