Article Summary –
December saw sluggish hiring with only 50,000 jobs added, concluding a year marked by weak employment gains despite low layoffs and unemployment rates. Economic growth has increased, yet businesses are cautious about hiring due to factors like tariff uncertainties, inflation, and the rise of artificial intelligence, which may replace some jobs. The lower unemployment rate and steady growth, driven by strong consumer spending, provide some optimism, but concerns persist about the impact of automation, low job gains, and tariff policies on the job market.
WASHINGTON (AP) — December’s sluggish hiring concluded a year of weak employment gains, leaving job seekers frustrated despite low layoffs and unemployment rates.
Employers added only 50,000 jobs in December, compared to a revised 56,000 in November, according to the Labor Department report on Friday. Unemployment dropped to 4.4% from November’s 4.5%.
The data shows businesses are hesitant to hire even as economic growth increases. Many companies have slowed hiring after a pandemic boom due to tariff uncertainty, high inflation, and the rise of artificial intelligence.
Economists, however, are optimistic about the unemployment rate decrease. The Federal Reserve, which cut interest rates three times last year, is cautious.
“The labor market stabilizes, but with slower job growth,” said Blerina Uruci, T. Rowe Price’s chief economist. “There’s no urgency for further Fed rate cuts.”
Some Federal Reserve members are worried about ongoing inflation, while others worry about stunted hiring, supporting lower borrowing costs to boost growth.
November’s job addition fell from 64,000 to 56,000 with October experiencing a steeper decline, losing 173,000 jobs instead of the estimated 105,000. These figures are revised as more business surveys are received.
Most December jobs arose in health care, adding 38,500, and hospitality sectors, which grew by 47,000. Government roles increased by 13,000, mostly at state and local levels.
Manufacturing, construction, and retail sectors lost jobs. Retailers cut 25,000 positions, indicating weak holiday hiring. Manufacturing job losses persisted since April, following Trump’s tariff announcements.
Friday’s report is crucial as it provides the first comprehensive labor market data in three months. October’s report was missed due to the government shutdown, and November’s data was impacted by the closure.
Throughout the year, job growth was modest, sharply declining after April’s tariff decisions by Trump. The economy gained only 584,000 jobs in 2025, in contrast to over 2 million in 2024, marking the smallest annual gain since the 2020 COVID-19 pandemic.
Trump claimed on social media that new jobs were in the private sector, with government positions decreasing. His statement included December’s numbers and earlier revisions, received by the White House ahead of public release.
Trump mentioned that 654,000 jobs were added privately since January, while government jobs dropped by 181,000, but his post didn’t clarify December’s new information. Job reports are typically confidential as they can influence financial markets.
Subdued hiring is tied to more than corporate job reluctance. An aging population and reduced immigration mean fewer job creations are needed to maintain unemployment stability. Therefore, a 50,000-job gain isn’t as weak as previously thought.
Low layoffs indicate companies aren’t slashing jobs as in recessions. The “low-hire, low-fire” market provides job security, but finding new jobs is challenging.
Ernesto Castro, 44, has struggled to find a job since May, with limited interview opportunities despite his decade-long software support experience.
“It’s been awful,” Castro said, attributing problems to AI adoption by companies. He considers entrepreneurship or project management roles as alternatives.
Tariff uncertainty has led firms to delay hiring. Steve Heckeroth, CEO of Renewables, Inc., postponed adding staff due to shifting costs and duties on parts from countries like China and India.
“Tariffs have delayed us six months, with uncertain input prices,” Heckeroth expressed.
Economists predict hiring acceleration this year due to growth and tax cuts. However, job growth stalling could hamper future expansion, or automation and AI could limit job needs. Productivity has improved, increasing company output without additional jobs and boosting worker pay eventually.
Despite slow job gains, the economy expanded at a 4.3% annual rate in last year’s July-September period, driven by strong consumer spending. The Federal Reserve Bank of Atlanta forecasts a 2.7% growth rate for the year’s last quarter.
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