U.S. job growth stalls as unemployment rate dips, data shows

WASHINGTON, UNITED STATES — United States job creation slowed more than anticipated in December, adding only 50,000 nonfarm payrolls—compared to 56,000 in November—as several key sectors shed workers. 

However, the national unemployment rate unexpectedly dipped to 4.4%, suggesting a cooling yet resilient labor market, according to the Bureau of Labor Statistics‘ monthly report.

“The United States is in a jobless boom,” Heather Long, Chief Economist at Navy Federal Credit Union, told CNN. 

“There was almost no hiring in 2025. We would be talking about job losses in 2025, if it weren’t for health care and social assistance.”

Structural shifts, AI and tariffs weigh on U.S. job gains

The December employment report shows that employment momentum has greatly slowed, and the only sectors recording job gains are a few service-driven sectors. 

The whole year saw the economy generate only 584,000 jobs, averaging 49,000 a month, a very high drop compared to the 2 million that were generated in 2024. 

In a separate report by Reuters, most of the minimal percentage growth in the past month has been in restaurants and bars (+27,000), health care (+21,000), and social assistance (+17,000), as retail, manufacturing, and construction lost 44,000 jobs in total. 

Economists view this stagnation as a structural problem rather than a cyclical recession. Analysts point to President Donald Trump’s aggressive trade policy and the related rise in tariffs as a direct reason for the loss of manufacturing jobs. 

At the same time, as countless companies invest significantly in artificial intelligence (AI), it may cause jobless growth, where companies do not know how to staff at the onset of technological change and opt not to hire, even as the economy expands. 

Lydia Boussour, Senior Economist at EY-Parthenon, notes, “Throughout the year, persistent policy headwinds weighed on business sentiment and curtailed hiring, prompting many firms to remain cautious and prioritize cost control and flexibility in response to an unpredictable operating environment.”

These reasons indicate that the problematic issues of the labor market are rooted in the existing policy and technological patterns.

A commentary by Brian Bethune, Financial Economist and Professor at Boston College, notes that “with these revisions, the story of payroll employment in 2025 will convert, ex post facto, from ‘snail-like growth’ to ‘recessionary-like conditions.’”

Mixed jobs data complicates Fed policy and hiring outlook

The report is both weak and strong at the same time, creating a complex situation for policymakers and job seekers. 

The unemployment rate was revised down to 4.5% in November, as employment remained flat and wages increased 3.8% year over year. 

The two scenarios suggest that the Federal Reserve will not adjust interest rates during its January 27 to 28 meeting to maintain a balance between concerns about low job growth and signs of tightness.

However, this “low-hire or low-fire” environment masks significant underlying strain. The number of long-term unemployed and people working part-time for economic reasons is rising. 

Job growth is so highly concentrated that it sidelines seekers outside a few sectors, lengthening job hunts. Furthermore, historical data have been overcounted; the BLS estimates about 911,000 fewer jobs were created in the 12 months through March 2025 than initially reported. 

Nicole Bachaud, ZipRecruiter‘s labor economist, shares these concerns. “Unemployment is increasingly becoming a permanent state rather than a temporary transition,” she said.

Another report from Finance & Commerce notes that this contradictory data—falling unemployment amid tepid hiring and revised-down figures—creates a landscape that, according to Laura Ullrich, Director of Economic Research in North America at the Indeed Hiring Lab, can “feel quite broken for many job seekers” even without a sharply rising jobless rate.

This mixed report signals a major change in the American labor market, where a falling unemployment rate can no longer hide the deeper reality of slowing job growth, a trend set to define the future of work as automation and concentrated hiring that leave many workers behind.