The U.S. labor market is approaching the end of 2025 with a significant slowdown in job growth, marking one of the weakest years for employment gains in decades. With the final jobs report set to be released by the Bureau of Labor Statistics (BLS) on Friday at 8:30 a.m. ET, economists are bracing for varied predictions regarding the health of the labor market. According to the FactSet consensus estimates, the unemployment rate is expected to tick down slightly to 4.5%. This figure is down from a four-year high of 4.6% set in November.
David Michael Tinsley, a senior economist at Bank of America Institute, pointed to President Donald Trump’s tariff announcement in April 2025 as a pivotal moment that contributed to the labor market’s unevenness. That decision continues to profoundly affect all sectors, particularly nonprofits. As we approach the end of the year, there is heightened concern about the stability of their jobs and hiring in general.
Economic Trends and Employment Landscape
As 2025 has marched on, the labor market has increasingly been defined by extreme divergence—particularly across different sectors of the economy. Importantly, healthcare and leisure and hospitality have joined the pack of frontrunners in jumping ahead in job creation. Collectively, these sectors account for about 22% of all employment. Yet, they account for a staggering 84% of net job growth from January through November this year.
Nela Richardson, the chief economist at ADP, laid out why these trends are so important. She noted that 2025 has seen the lowest net hiring in a non-recessionary year since 2003. “Health services is an expensive type of service for most consumers. Leisure and hospitality spending is a discretionary service for all consumers,” she explained. The reliance on these sectors reflects a broader economic reality: a K-shaped recovery where higher-income consumers are driving spending.
With more than half the year behind us, millions of workers are reporting increased fears over job security and building recession worries. A December survey revealed that respondents’ expectations of job loss had risen to their highest mean probability since April 2025. Consumer confidence in finding a job further plummeted to an all-time low of 43.1%. This information is drawn from the Federal Reserve Bank of New York’s most recent Survey of Consumer Expectations.
Job Market Dynamics and Future Outlook
The BLS’s Job Openings and Labor Turnover Survey indicated a concerning trend: fewer job openings were available in November, with hiring activity slumping to its lowest rate in over a decade. In November, corporate America announced 35,553 layoffs. Yet, strange as it may seem, this month witnessed the smallest number of job cut announcements in 17 months as December approached. Andy Challenger from Challenger, Gray & Christmas noted this paradox: “The year closed with the fewest announced layoff plans all year; while December is typically slow, this, coupled with higher hiring plans, is a positive sign after a year of high job-cutting plans.”
Employers have been walking on eggshells across this uneven labor market terrain. Total job gains for 2025 are forecast to total just 710,000—down from recent years by over 900,000 jobs. Tinsley remarked on the current state of the labor market: “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.”
Sector Performance and Economic Disparities
These sizable performance gaps between the public and private sectors have contributed to a broader debate about the state of the U.S. economy itself. While industries like healthcare and leisure and hospitality are booming, other industries are still suffering in this topsy-turvy recovery. The struggles point to an economic chasm between sectors that are booming compared to those that are decades behind.
Richardson reiterated that these two sectors are emblematic of a K-shaped economy: “These two sectors are consistent with a K-shaped economy where higher-income consumers are driving spending.” As this trend continues, it serves as a warning of potential long-term consequences for workers’ careers and financial security.