U.S. Payroll Growth Slows as December Adds 50,000 Jobs

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Overview

The latest U.S. jobs report showed a labor market that remains steady but continues to cool, according to data released by the U.S. Bureau of Labor Statistics.

In December, total nonfarm payrolls increased by 50,000 jobs, while the unemployment rate held unchanged at 4.4 percent. Both figures suggest that hiring momentum has slowed but the job market has not weakened sharply.

Key Takeaways

• Payrolls rose by 50,000 in December; unemployment held at 4.4%.
• Gains came from food services, health care, and social assistance; retail lost jobs.
• Wages increased modestly and hours dipped slightly, pointing to a cooling market.

Sector-Specific Trends

Job growth remained concentrated in a few areas. Food services and drinking places continued to add workers, reflecting stable consumer demand. Health care also saw steady hiring, particularly in hospitals, while social assistance added jobs mainly in individual and family services. These sectors have been the most consistent sources of employment growth over the past year.

Retail trade, however, moved in the opposite direction. The sector lost 25,000 jobs in December, with the biggest declines seen in general merchandise and food and beverage stores. This highlights ongoing pressure on traditional retail as consumer spending patterns remain cautious.

Broader Labor Market Context

Looking at the broader picture, payroll growth in 2025 was much slower than the year before. Employers added around 584,000 jobs over the year, a sharp drop compared to the strong gains seen in 2024. This confirms a gradual slowdown rather than a sudden break in the labor market.

On the household side, the number of unemployed people remained near 7.5 million. Long-term unemployment showed little change during the month but was higher compared to a year ago, suggesting it is taking longer for some workers to find new jobs. Labor force participation and the share of the population that is employed were both stable.

Wage Growth and Policy Implications

Wage growth remained moderate. Average hourly earnings rose slightly in December and were up 3.8 percent over the past year, pointing to easing but still positive pay increases. Meanwhile, the average workweek edged lower, another sign that employers are becoming more cautious with hours.

Overall, the December report paints a picture of a labor market that is cooling gradually, not collapsing. Hiring is slower, job gains are narrower, and revisions to previous months were slightly negative. The next employment report, due in early February, will be closely watched to see whether this trend continues into the new year.

The steady unemployment rate and modest job gains make an interest rate cut this month less likely, as policymakers may prefer to wait for clearer signs of weakness in the labor market before easing policy.