With the United States approaching the last jobs report of 2025, economists are bracing for all sorts of outcomes. Overall, they expect these findings will not significantly alter the narrative about a persistently tight labor market. Nela Richardson, chief economist at ADP, emphasized that the job gains reported for December will likely not change the outlook for the labor market in the year.
The U.S. labor market has faced notably weak employment growth, with 2025 recording the lowest job gains seen in decades, aside from the extraordinary circumstances of 2020. Economists have varying predictions for December’s job report, reflecting the uncertainty surrounding employment trends and economic recovery.
The Bureau of Labor Statistics will deliver the next such report this coming Friday. As ever, this report is likely to shine a light on what’s happening in today’s volatile labor market. The consensus estimate for December’s new jobs is 55,000, which would be consistent with the lackluster growth all year long. One of the most underappreciated recent developments, according to Heather Long, chief economist at Navy Federal Credit Union. For 2025, total job gains are projected to be a relatively modest 710,000.
The U.S. jobs market has become more like an “exclusive club,” where getting a job takes months for most people. Oren Klachkin, lead financial market economist at Nationwide, pointed out the weak hiring pace. He used the opportunity to call attention to the continued volatility of the economic picture.
“It’s not super-certain that we’ll be absolutely past all of the shutdown impacts, so we’ll have to wait and see what the numbers look like,” – Oren Klachkin, Nationwide’s financial market economist.
Despite a slight drop in the rate of workers quitting their jobs, layoff activity was still fairly non-existent in November. The BLS’ Job Openings and Labor Turnover Survey surprised everyone by indicating that U.S. businesses sought out fewer workers in the month. As a consequence, hiring crashed to its lowest level in more than a decade, excluding pandemic-related figures.
That’s the question David Michael Tinsley, senior economist at Bank of America Institute, posed on X (formerly Twitter). Further, while hiring has clearly cooled, many indicators point to the worst downturn being in the rearview mirror.
“While the labor market still is arguably in a low-hire or low-fire mode, it does look – in our data – as though the worst of the slowdown could be behind us,” – David Michael Tinsley, senior economist at Bank of America Institute.
Even with this cautious optimism, Tinsley cautioned that the underlying momentum for job growth is still quite weak. He stated, “The true, underlying momentum for job growth is likely much softer and has been much softer for some time now.”
That complication only deepens when you consider the challenges facing some of those sectors. Richardson noted that health care services and leisure and hospitality services are two big parts of the economy most affected by the whim of consumer spending tastes. She further articulated that health services have become prohibitively high for consumers, yet leisure and hospitality spending is elective.
“These two sectors are consistent with a K-shaped economy where higher-income consumers are driving spending,” – Nela Richardson, chief economist at payroll company ADP.
With December’s jobs report coming up, analysts are still on the lookout for a reversal in employment trends. The unemployment rate is projected to tick down to 4.5%, after hitting a four-year high of 4.6% in November. This modest increase could provide an encouraging sign in a tumultuous year that has been highlighted by disappointing job creation.