On Friday at 8:30 a.m. ET, the Bureau of Labor Statistics will release the latest snapshot on the health of the US labor market – and economists’ estimates vary wildly over what we should expect for the final jobs report of 2025.
The consensus estimates are for 55,000 jobs to have been added in December, underscoring how last year’s employment growth was the weakest in decades.
But some economists say seasonal factors such as the holiday hiring peak could put December’s monthly total somewhere north of 105,000.
The unemployment rate is expected to tick down to 4.5% after hitting a four-year high of 4.6% in November, FactSet consensus estimates show.
No matter what the numbers show, Americans are feeling increasingly hopeless about their employment prospects.
“Total job gains for 2025 are on track to be a meager 710,000,” Heather Long, chief economist at Navy Federal Credit Union, said in a statement. “That’s the worst hiring outside of a recession since 2003. Even 2010, on the heels of the Great Recession, was a better year for hiring than 2025.”
The perceived probability of finding a job hit a record low of 43.1% in December, according to the Federal Reserve Bank of New York’s latest Survey of Consumer Expectations, a closely watched survey that has been running since 2013.
Additionally, the December survey showed that respondents’ expectations of losing their job rose to the highest mean probability since April 2025.
For much of the past 12 months, extremely high uncertainty (from sweeping policies such as those related to tariffs); dramatic shifts in the nation’s immigration flows; and, to a much lesser extent, companies testing the AI waters, have resulted in muted employment gains – or even outright losses – across most industries.
The lone exceptions have been health care – an industry growing as a result of an aging population – and leisure and hospitality, which has reaped some of the spoils from an increasingly bifurcated economy.
“Health services is an expensive type of service for most consumers; leisure and hospitality [spending] is a discretionary service for all consumers,” said Nela Richardson, chief economist at payroll company ADP. “These two sectors are consistent with a K-shaped economy where higher-income consumers are driving spending.”
Those two sectors, which make up about 22% of all employment, accounted for 84% of the total job gains seen from January through November 2025. And for the remaining 78%, it’s been a far different story.
The labor market became even more lopsided after April 2025, when President Donald Trump made his biggest and broadest tariff announcement. Sentiment plummeted and uncertainty skyrocketed, stifling hiring plans in the process. From April through November 2025, job gains in health care and leisure and hospitality outpaced the net jobs added across the entire labor market during those eight months.
Pretty much every other industry is in the throes of a “hiring recession,” Navy Federal Credit Union’s Long said.
Data released earlier this week further confirmed the listless state of the broader labor market.
The BLS’ latest Job Openings and Labor Turnover Survey data released Wednesday showed that US businesses sought out fewer workers in November and hiring activity slumped to match its lowest rate in more than a decade (excluding the data- and economy-distorting pandemic).
At the same time, layoff activity remained low in November, along with the rate of people quitting their jobs.
A certain amount of turnover is needed for a healthy labor market and growing economy. But as it stands now, it’s taking months for people to find work as the US jobs market is more like an “exclusive club.”
Some economists believe, however, that a bottoming out of the labor market slowdown may be near.
Job cut announcements fell to a 17-month low in December, according to Challenger, Gray & Christmas data released Thursday morning.
Employers announced plans for 35,553 layoffs last month, while hiring announcements were the highest for the month since 2022, Challenger noted.
“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,” Andy Challenger, Challenger’s chief revenue officer, said in a statement.
In a separate report, the latest unemployment claims data showed that around 208,000 people filed a first-time claim for unemployment benefits for the week that ended January 3, according to the Department of Labor.
Additionally, data from Bank of America showed there was no acceleration in unemployment payments in the bank’s customer accounts in December.
“While the labor market still is arguably in a low-hire or low-fire mode, it does look – in our data – as though the worst of the slowdown could be behind us,” David Michael Tinsley, senior economist at Bank of America Institute, told reporters during a call on Wednesday.
