Article Summary –
December’s sluggish hiring resulted in only 50,000 new jobs, reflecting a year of weak employment growth despite low layoffs and unemployment, with the job market affected by factors such as tariff policies, inflation, and the potential impact of artificial intelligence. The unemployment rate decreased slightly to 4.4%, but job growth, especially in manufacturing, construction, and retail, remains hampered by economic uncertainty, although health care and the hospitality industries saw gains. Economists remain hopeful for accelerated hiring amid solid economic growth, with productivity increases potentially reducing the need for new jobs while automation and AI continue to influence employment dynamics.
WASHINGTON (AP) — December’s sluggish job growth capped a year of weak employment gains, leaving job seekers frustrated despite low layoffs and unemployment.
Employers added only 50,000 jobs last month, nearly unchanged from November’s revised 56,000, the Labor Department reported. The unemployment rate dipped to 4.4% from 4.5% in November, marking its first decline since June.
Businesses showed reluctance to hire even as economic growth improved. Many firms, having aggressively hired post-pandemic, don’t need more staff, while others face uncertainty from President Trump’s tariff policies, inflation, and artificial intelligence impacts.
Economists were encouraged by the drop in unemployment, despite prior concerns from the Federal Reserve, which cut interest rates three times last year.
“The labor market has stabilized, but with slower job growth,” said Blerina Uruci, chief economist at T. Rowe Price, noting no immediate need for further Fed rate cuts.
Federal Reserve officials are split; some worry about persistent inflation above the 2% target, while others support lowering borrowing costs to boost growth.
The Bureau’s revised figures show November and October job counts lower, with October showing a substantial drop of 173,000 positions.
December’s job gains occurred predominantly in health care and hospitality, with health care adding 38,500 jobs and restaurants and hotels gaining 47,000. State and local governments added 13,000 jobs.
Conversely, manufacturing, construction, and retail saw job losses. Retailers cut 25,000 jobs, reflecting weaker holiday hiring trends.
Wall Street scrutinized the report for a clean reading after a shutdown and distorted previous data.
Job gains were subdued all year following April’s tariffs, with only 584,000 jobs added in 2025, starkly lower than 2024’s over 2 million. It marks the smallest annual non-recession gain since 2003.
Despite this, Trump claimed via social media that private-sector job gains offset government job declines.
The hiring slowdown reflects broader economic factors, including an aging population and decreased immigration, meaning fewer jobs are needed to maintain unemployment levels.
Layoffs remain low, indicating firms’ reluctance to cut jobs, providing some job security even as finding new employment becomes challenging.
Ernesto Castro, with nearly a decade of software customer support experience, expressed difficulties finding a new job, suspecting AI’s growing role is partly responsible.
Subdued hiring remains a key economic issue as growth picks up but hiring weakens.
Tariff-related uncertainties also delay job additions, as seen in Renewables, Inc., where CEO Steve Heckeroth cited tariffs causing a six-month hiring delay.
Economists predict hiring will accelerate with solid growth and tax cut impacts, though automation may reduce job creation needs.
Productivity gains help companies maintain output without hiring, potentially boosting worker pay over time.
Despite slow job growth, the economy expanded by a 4.3% annual rate last year, driven by consumer spending, with forecasts suggesting slight slowing in the year’s final quarter.
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