U.S. payrolls rose 50,000 in December, less than expected; unemployment rate at 4.4%

• Full-year 2025 payroll gains averaged just 49,000 per month, down sharply from 168,000 monthly average in 2024
• October's job losses were revised to 173,000, much worse than the originally reported 105,000 decline
• Despite soft job growth, the broader economy showed strength with Q4 GDP tracking at 5.4% and holiday online spending rising 6.8% to a record $257.8 billion

U.S. Labor Market Summary: December 2025

Key Employment Data:

U.S. nonfarm payrolls increased by just 50,000 in December, missing the Dow Jones estimate of 73,000 and falling short of November's downwardly revised 56,000. The unemployment rate declined to 4.4%, better than the 4.5% forecast. The report revealed a mixed labor picture, with businesses reporting weak hiring while household employment showed gains.

Significant Revisions:

Historical data underwent notable downward adjustments. November payrolls were revised down by 8,000, while October's job losses deepened significantly to 173,000—substantially worse than the initial estimate of 105,000. For full-year 2025, monthly payroll gains averaged only 49,000, a sharp decline from 168,000 in 2024.

Broader Economic Context:

Despite weak employment numbers, the overall economy demonstrated resilience. The Atlanta Fed's GDP tracker projected 5.4% annualized growth for Q4 2025, following 4.3% growth in Q3. Consumer spending remained robust, with Adobe reporting holiday online spending reached a record $257.8 billion, up 6.8% year-over-year.

Market Implications:

The Federal Reserve, which implemented three rate cuts in late 2024, is closely monitoring employment trends for monetary policy guidance. Markets currently expect the Fed to maintain rates unchanged, with the next cut not anticipated until June, though this timeline could shift based on evolving labor market conditions.

Sectors Mentioned:

Bureau of Labor Statistics data; Federal Reserve monetary policy; consumer spending representing two-thirds of the $31 trillion U.S. economy.

The mixed signals—weak job creation alongside falling unemployment and strong economic growth—present a complex picture for policymakers and investors.