The latest jobs report capped off 2025 with steady unemployment, but less job growth than expected.
The unemployment rate ticked down to 4.4% from a downwardly revised 4.5%. This is 0.3 percentage points higher than last December, and above the level experienced throughout most of the year.
Overall, job growth stalled out in 2025 with only 584,000 jobs added. This is well below the 2.0 million jobs added in 2024. To put this figure in historical context, it is the lowest number of jobs added outside of a recession since 2003. In fact, jobs added outside of a recession have only been lower than the current level 3 times in history.
So, while the latest jobs report didn’t show a significant increase in unemployment, it did show evidence of a cooling job market throughout the year. This reiterates that there is “no risk-free path” for monetary policy in 2026 as the showdown between above target inflation and deteriorating employment heats up.