On Friday, the Bureau of Labor Statistics will unveil the latest figures detailing the health of the U.S. labor market, with economists holding a wide range of expectations for the final jobs report of 2025.
Consensus forecasts suggest an addition of 55,000 jobs in December, highlighting a year characterized by the weakest employment growth in decades, outside of recession periods. Some economists speculate that seasonal factors, particularly the holiday hiring surge, could push December’s total above 105,000.
The unemployment rate is anticipated to decline slightly to 4.5%, down from a four-year high of 4.6% recorded in November, according to FactSet consensus estimates. However, the sentiment among Americans regarding their employment prospects remains grim.
Heather Long, the chief economist at Navy Federal Credit Union, noted, “Total job gains for 2025 are on track to be a meager 710,000, the worst hiring outside of a recession since 2003.” She emphasized that even the year 2010, just following the Great Recession, saw better hiring conditions than those experienced in 2025.
Moreover, a recent Survey of Consumer Expectations conducted by the Federal Reserve Bank of New York revealed that the perceived probability of finding employment dropped to a record low of 43.1% in December, while respondents’ expectations of job loss surged to their highest average since April 2025.
Over the past year, factors such as sweeping policy changes related to tariffs, significant fluctuations in immigration, and companies experimenting with artificial intelligence have collectively contributed to stagnant employment numbers or even job losses across several industries. The sectors mainly defying this trend have been healthcare, driven by an aging population, and leisure and hospitality, benefiting from a divided economic landscape.
Nela Richardson, chief economist at payroll company ADP, stated, “Health services is an expensive type of service for most consumers; leisure and hospitality spending is discretionary for all consumers.” These two sectors accounted for 84% of job gains from January through November 2025, despite representing only 22% of overall employment, painting a stark contrast to the experiences of the remaining 78% of industries.
The labor market’s imbalance intensified following a major tariff announcement from President Donald Trump in April 2025, which significantly dampened sentiment and stifled hiring initiatives. During the months that followed, gains in healthcare and leisure and hospitality eclipsed net job increases across the entire labor market.
A report released earlier this week posited additional evidence of a sluggish labor market. The Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey indicated that U.S. businesses showed decreased demand for workers in November, with hiring activity matching its lowest levels in over a decade, excluding disruptions caused by the pandemic. At the same time, layoff rates remained low, as did the rates of individuals voluntarily leaving their jobs.
Despite the current challenges in the labor market resembling an “exclusive club,” some economists are hopeful about potential recovery. Data from Challenger, Gray & Christmas showed that job cut announcements fell to a 17-month low in December, with employers planning only 35,553 layoffs – the fewest announced layoffs for the year. Concurrently, hiring announcements peaked for the month, marking the highest figures since 2022.
Andy Challenger, chief revenue officer at Challenger, remarked, “The year closed with the fewest announced layoff plans all year; while December is typically slow, this, coupled with higher hiring plans, is a positive sign after a year of high job-cutting plans.”
In addition, unemployment claims data revealed that around 208,000 individuals filed initial claims for unemployment benefits for the week ending January 3. Analysis from Bank of America disclosed no significant rise in unemployment benefits within customer accounts during December.
David Michael Tinsley, senior economist at Bank of America Institute, commented during a media conference, “While the labor market still is arguably in a low-hire or low-fire mode, it does appear – according to our data – that the worst of the slowdown could be behind us.”
