By the end of 2025, the US labor market was hit with a significant drop in job growth. In December, the final month of the nonfarm payrolls survey, employers created just 50,000 jobs. That was the smallest monthly job increase since the beginning of the COVID-19 pandemic. While the economy remains under immense pressure, the unemployment rate did tick down a bit, falling to 4.4%, indicating some degree of stability.
In entire year of 2025 the United States averaged a net gain of 49,000 jobs per month. This was a big drop from the projected two million jobs created per month for 2024. In short, the Labor Department’s most recent data paints a troubling picture. This year the national employment overall has gotten much worse than it was last year. December’s job gains were less than economists had expected, adding to worries about the strength of the labor market.
The positive job creation in 2025 is happening at a crawl. Many things are to blame, but one of the biggest is the policy shift brought about under former President Donald Trump. These policies were characterized by high tariffs on all imports, a draconian crackdown on immigration and forced austerity. Big cuts in government spending have historically affected hiring trends in all the sectors measured.
While the job market is cooling, we are still not seeing these mass layoffs occur. This should provide comfort to both American workers and American economists. It’s clear from our data that hiring has significantly cooled over the past year. To that end, we have seen analysts doubting the long-term path of employment in the United States.
With employers now facing a much more challenging economic climate, the future pace of job creation is less clear. Despite December’s modest increase, these issues aren’t going away. It’s a wake-up call that, even though some indicators point to improvement, people are still struggling. President Trump’s policy changes are still affecting the economy to this day. Finally, lots of people want to know how these changes will affect the job market of the future.