Hiring held firm in the US last month, official data showed, amid uncertainty over the strength and direction of the world’s largest economy.
Employers added 50,000 jobs to the US labor force last month, capping the weakest year of growth since the pandemic, according to data released from the US Bureau of Labor Statistics on Friday.
The closely watched reading was slightly shy of the approximately 73,000 jobs economists expected to be added in the US economy in December.
Previous readings for October and November were also revised lower, with the BLS now estimating that the US added 76,000 fewer jobs during those two months. In October, during the longest US government shutdown in history, the US economy shed 173,000 jobs.
The unemployment rate, which rose to a four-year high of 4.6% in November, fell back to 4.4% in December.
Economists describe the labor market as being in a “no hire, no fire” phase, in which job growth continues but remains subdued. Data from outplacement firm Challenger, Gray & Christmas showed that layoffs in December were nearly half the level of those recorded in November.
After the US federal government shutdown halted economic data collection in October and the beginning of November, December was the first month that the statistics bureau could fully collect jobs data.
Federal Reserve officials are expected to weigh this data at their next policy meeting at the end of January, when they will decide whether to lower interest rates, which sit at a range of 3.5% to 3.75%, or keep them on hold.
Officials have signaled that a pause in cuts is likely. Minutes from the board’s December meeting revealed stark division when members made their third consecutive cut to rates last month. “Some participants suggested that, under their economic outlooks, it would likely be appropriate to keep [rates] unchanged for some time,” the notes said.
In a press conference last month, the Fed chair, Jerome Powell, said officials will proceed with caution as they remain hopeful that the labor market will stabilize in the upcoming year and inflation will start to cool. Prices rose 2.7% in November, a cooling-off after rising 3% in September.
But the Fed’s vigilance over the economy continues to clash with the outlook of Donald Trump and his economic advisers, who have demanded lower interest rates. Cutting rates could stimulate economic growth, including bolstering the labor market, but at the risk of making prices rise faster.
In a speech on Thursday, the treasury secretary, Scott Bessent, urged the Fed to continue cutting rates this year. “It’s the only ingredient missing for even stronger economic growth, which is why the Fed should not delay,” he said.
While Fed officials, including Powell, have suggested that Trump’s immigration and tariff policies have likely been a destabilizing force in the labor market and for inflation, the White House has made clear it has an opposing view.
In a statement last month, after the release of November’s jobs data, the White House claimed the increase in the unemployment rate “is entirely because more Americans are jumping back into the job market as the booming Trump Economy brings them off the sidelines”, though November’s data had shown that the number of Americans not in the labor force had increased over the preceding year.