December 2025 U.S. Jobs Report: 153,000 New Positions and Steady 4.2% Unemployment Rate

Diccon Hyatt, a seasoned financial and economic journalist, has extensively covered the pandemic-era economy through hundreds of clear and insightful articles. His work focuses on breaking down complex economic trends and their effects on personal finances and markets. He has also contributed to U.S. 1, Community News Service, and the Middletown Transcript.

Key Highlights

• In December 2024, U.S. employers likely added approximately 153,000 jobs, aligning with the six-month average, while unemployment remained steady at a historically low 4.2%.
  
• The job market has moderated since the post-pandemic surge but remains stable.
  
• The future trajectory of employment depends heavily on President Donald Trump’s forthcoming policy decisions.
  
• Investors are closely monitoring these figures, concerned that stronger-than-expected job growth could delay Federal Reserve interest rate cuts.
  

The U.S. economy closed 2024 with consistent job creation, continuing the steady growth trend seen in recent months.

According to economists surveyed by Dow Jones Newswires and The Wall Street Journal, the Bureau of Labor Statistics’ upcoming report is expected to show 155,000 new jobs added in December. This figure is below the 227,000 jobs added in December 2023 but slightly above the six-month average of 143,000. The unemployment rate is forecasted to remain at 4.2%, a relatively low level by historical standards.

ADP’s payroll data released earlier indicated 122,000 private-sector jobs added in December, below the median forecast of 136,000. While ADP’s numbers often precede official data, economists view them as less reliable.

Job growth has slowed compared to the early post-pandemic period when demand for workers surged as the economy rebounded from the COVID-19 recession. Elevated borrowing costs, driven by the Federal Reserve’s interest rate hikes since 2022 aimed at controlling inflation, have restrained borrowing and spending, impacting hiring momentum.

Looking Ahead: The 2025 Job Market Outlook

Economists remain divided on whether the job market will rebound in 2025 or continue its slowdown.

Predictions carry extra uncertainty this year due to potential policy shifts under President Trump’s second term. Key factors include possible tariff implementations and corporate tax reforms, which could significantly influence employment trends.

Currently, the labor market is stable: employers are cautious, hiring moderately without resorting to widespread layoffs.

Thomas Barkin, President of the Federal Reserve Bank of Richmond, noted, "Employers, mindful of past labor shortages and anticipating tighter labor supply, are avoiding workforce shortages by maintaining staffing levels. While hiring is cautious and layoffs remain low, this balanced labor market is healthy."

Investor Focus: Impact on Financial Markets

Financial markets are closely watching December’s employment data amid concerns that stronger job growth could prevent the Federal Reserve from further cutting interest rates.

Recent economic indicators have demonstrated surprising resilience, dampening expectations for continued rate reductions after three cuts since September.

Labor data showing higher-than-expected job availability in November increased market uncertainty, leading to stock declines and pushing 10-year Treasury yields to their highest point since April.

As of early January 2025, market forecasts suggest nearly a 33% chance that the Fed will not reduce rates during the first half of the year, up from 11% a month prior, according to CME Group’s FedWatch tool.

The Federal Reserve maintained historically high interest rates through September 2024 to combat inflation but has since reduced rates by a full percentage point across three meetings. However, officials caution that rate cuts may slow due to persistent inflation pressures.

Update as of January 9, 2025: This article includes the latest Federal Reserve interest rate decisions and their implications for financial markets.

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