The United States is feeling the effect of the great deceleration, as employers created just 50,000 jobs in December 2025. This paltry increase is an even more modest performance than the Covid-19 pandemic of 2020. The unemployment rate, though, fell to 4.4%, offering some hope in an otherwise decidedly disappointing employment picture.
2025, job gains were averaging a meager 49,000 jobs per month. That is a dramatic change from the two million jobs we expect to be added in 2024 – on a monthly basis. This sharp increase in hiring represents the incredible headwinds companies faced this year. A big part of that was economic uncertainty, linked to policy developments coming out of then-President Donald Trump’s administration.
In recent years, mainly under Trump’s leadership, the administration has upended this world for employers. Tariffs on imported goods, an immigration crackdown, and forced austerity have only added to a perfect storm. These actions helped lead to a significant deceleration in hiring in all industries, leading to less job creation than expected. With December’s labor growth missing the mark, there is still an air of caution as to how strong the US labor market truly is.
Even with this slowdown, the widely predicted wave of mass layoffs never materialized. That means businesses are a bit skittish yet serious about maintaining their employees, despite a deceleration in hiring. All that said, companies still find themselves operating in a climate filled with ambiguity, making it harder to spark healthy job creation.
The US labor market continued to get worse through 2025. This drop could be attributed to the mass layoffs experienced during the onset of the Covid pandemic in 2020. As businesses got used to a new economic environment and priorities from consumers, they pursued a much more cautious strategy on hiring. Sadly, this trend has continued into the new year, causing a complete standstill in job creation.