The U.S. labor market is starting to come to a screeching halt. In troubling new data released this week from the Labor Department, we learned that just 50,000 jobs were added in December 2025. This modest growth marks the weakest annual job creation since the Covid pandemic, as employers added an average of just 49,000 jobs per month throughout the year. The net negative impact points to a cooling labor market that is increasingly alarming economists and policymakers.
The policy changes that President Donald Trump’s administration has put in place are responsible for much of the new economic reality. His administration’s singular focus on tariffs has wreaked havoc on international trade and stunted job creation in these and other key industries. An immigration crackdown has reduced the labor supply in industries reliant on immigrant workers, potentially limiting job opportunities in those fields. Cuts to federal, state, and local government spending have contributed to a much too rapid slowing of overall economic activity.
In spite of the meager job growth, the unemployment rate fell a notch to 4.4% in December. This drop is surely a relief, as the specter of mass layoffs has still not come to pass. The face of the general employment market had a difficult year. In 2024, the predicted increase was two million jobs each month. This marks a sharp turn from the job growth immediately preceding the adoption of the new economic policies.
On a macro level, employer demand in the United States has decidedly shifted downward over the last twelve months. The data indicates that employers are continuing to be careful in their hiring plans, responding to economic uncertainty with caution. The paltry job gains for December are a fitting close to a year marked by continued inaction and hardship for millions of Americans looking for work.