US jobs add 50,000 in December, miss estimates as unemployment dips to 4.4%

• Total payroll employment for 2025 rose by only 584,000 jobs (averaging 49,000 monthly), a sharp slowdown from 2 million jobs added in 2024, with hiring concentrated in food services, healthcare, and social assistance.
• Long-term unemployment (27+ weeks) remained elevated at 1.9 million, nearly 400,000 higher than a year earlier, while the BLS estimated 911,000 fewer jobs were created through March 2025 than previously reported.
• The Federal Reserve is now unlikely to cut interest rates in January following the unemployment rate decline, with markets rising modestly as investors weigh trade policy risks and await benchmark data revisions.

Summary: US December Jobs Report Misses Expectations

Key Figures:

• Nonfarm payrolls increased by 50,000 in December, significantly below the 73,000 consensus estimate
• Unemployment rate fell to 4.4%, better than the expected 4.5%
• 2025 total payroll employment rose by only 584,000 (averaging 49,000 monthly), sharply down from 2 million in 2024
• Long-term unemployment (27+ weeks) stands at 1.9 million, up 400,000 year-over-year, representing 26% of total unemployment

Market Context:

The data reveals a "no hire, no fire" labor market, with companies reluctant to add or cut workers despite steady economic growth. Job gains concentrated in food services, healthcare, and social assistance, while retail shed positions. Strong GDP and productivity growth, driven by AI investment, has allowed companies to expand output without increasing headcount.

Data Concerns:

The BLS previously estimated 911,000 fewer jobs were created through March 2025 than initially reported, raising questions about data accuracy. Full benchmark revisions will be published with January's employment report.

Market Reaction:

US equity futures rose following the release: S&P 500 +0.3%, Nasdaq 100 +0.4%, Dow +132 points. Investors remain focused on potential Supreme Court rulings regarding President Trump's tariffs.

Fed Implications:

A January rate cut is now highly unlikely following the unemployment rate decline. The Federal Reserve, which cut rates to 3.50%-3.75% in December, had already signaled a pause. Analysts suggest the economy may need additional Fed support, but not immediately. The weak hiring trend has been partly attributed to trade and immigration policies, though cooling began earlier.