December jobs report: No fireworks to end the year

The latest jobs numbers are out from the U.S. Bureau of Labor Statistics. What do they mean for job seekers, employers and investors? Here’s a quick take from Glassdoor’s Chief Economist Daniel Zhao.

The December jobs report caps a turbulent 2025. Uncertainty spiked as tariffs and a government shutdown rattled the economy. Through it all, the job market slowed gradually and the December jobs report provided no fireworks to ring in the new year. While jobs growth has not deteriorated solidly into negative territory, the fizzling of jobs growth to end 2025 dampens some hope that jobs growth was rebounding after a sluggish summer on the back of strong consumer spending.

Key stats

Recapping 2025

After a turbulent year for the economy, the December jobs report provided one last look at a slowing job market. Payroll growth for the full year totaled 584,000, the slowest pace since 2020 and the slowest pace in a non-recessionary year since 2003.

Private payroll growth, however, was a more solid 733,000 jobs added in total during 2025. The gap between nonfarm and private payroll growth highlights the large job losses in the government sector, particularly due to the federal government’s hiring freeze, layoffs and deferred resignation program. Federal government employment shrank by 274,000, the largest single year decline since 1946, when the U.S. was recalibrating post-World War II.

In the private sector, health care & social assistance dominated total jobs growth to an unusually large degree. Health care & social assistance added 712,600 jobs in 2025, accounting for a whopping 97% of private job gains. While health care has traditionally been resilient to recessions and is poised to continue growing as the American population ages, the narrow breadth of jobs growth points to fragility in the job market.

Manufacturing has had a rough 2025, losing 68,000 jobs in total and ending the year on a 8-month streak of consecutive job losses. Tariff policy is intended to protect American manufacturing, but onshoring supply chains is a long-term play that will take time to bear fruit.

The unemployment rate rose from 4.1% in December 2024 to 4.4% in December 2025, a 0.3 percentage point rise. Traditionally, increases in the unemployment rate have raised recession alarm bells because increases tend to snowball. But downward revisions and the December drop temper concerns about imminent deterioration. Indeed, the Sahm rule (a common recession indicator that triggers on when unemployment rises at a certain rate) triggered on in 2024, but no recession followed. By contrast, in 2025, the unemployment rate rose but not enough to trigger the Sahm rule. The slow and steady rise, however, is a concern that economists will be watching closely in 2026.

Methodological updates coming

The December jobs report came with a few methodological notes for coming jobs reports. Population control adjustments are usually released with the January jobs report, but this year, they will be delayed until the February report is released in March and the population control adjustments will be retroactively applied to January at a later date.

Population control adjustments are annual updates that help the household survey adjust for changing population trends. The survey is constructed such that population control adjustments are more likely to affect estimated levels rather than rates. The population control updates are especially important this year because the previous population controls were based on a different policy world that no longer holds as net immigration dramatically declined in 2025.

In the January report, benchmark revisions will land, using more complete but slow-arriving unemployment insurance records to benchmark March 2025 employment levels. Preliminary estimates indicate a large negative revision (-911,000) to March 2025 employment is likely. Starting in the January report, a new birth-death model that updates each month will be used that should hopefully reduce the size of benchmark revisions in the future.

These benchmark revisions will affect our understanding of the trajectory of the job market in 2024 and 2025. The large negative revision is likely to indicate that jobs growth between March 2024 and March 2025 was significantly slower than originally reported. The effect on trends post-March 2025 are less clear, but could result in a labor market looking closer to stall speed.

More insights

The job market added 50,000 jobs in December, down from 56,000 in November. October was revised downward sharply from to -173,000 from -105,000 There have been 3 months of negative jobs growth in 2025.

Health care & social assistance and leisure & hospitality were the main drivers of jobs growth in H2 2025. Almost every other major sector was flat or lost jobs in H2.

Average hourly earnings grew 3.8% year-over-year in December, up from 3.6% in November (revised up from 3.5%). However, production & nonsupervisory wage growth slowed to 3.6% in December, slowest pace since 2021.

Black unemployment dropped to 7.5% after rising in November to 8.2%, though the rate still remains elevated.

Workers part-time for economic reason ticked down slightly in December after spiking in November, though this figure remains elevated, pointing to more workers are being forced to take part-time jobs despite wanting full-time hours.

Prime-age (25–54) labor force participation was flat while prime-age employment-population ratio ticked up 0.1 percentage point. Both figures remain a touch below recent peaks but at a relatively healthy level overall, without sign of more dramatic deterioration.