Volkswacht Bodensee - US December hiring misses expectations, capping weak 2025

US employment rose by 50,000 last month, slowing from a revised 56,000 in November, the Department of Labor said.

The jobless rate -- measured by a different survey within the report -- inched down to 4.4 percent from 4.5 percent.

For 2025, payroll employment grew by 584,000, significantly lower than the increase of 2.0 million in 2024.

Investors will be digesting the latest data for its potential bearing on the Federal Reserve's interest rate decisions, as a sharp deterioration in the jobs market could nudge the US central bank to lower rates sooner to boost the world's biggest economy.

While December's figures were still decent, job growth has slowed significantly over the past year while the unemployment rate crept up towards its highest levels since 2021.

Friday's hiring number was lower than the 73,000 figure expected by economists surveyed by Dow Jones Newswires and The Wall Street Journal.

Among sectors, employment continued trending up in restaurants and bars, health care and social assistance, the Labor Department said.

But retail trade lost jobs, the report added, with employment dropping in areas like warehouse clubs, supercenters and other merchandise retailers.

"Since reaching a peak in January, federal government employment is down by 277,000, or 9.2 percent," the department said.

- 'Warning lights' -

"Job growth in 2025 was the weakest in over a decade, outside of the pandemic," Senator Elizabeth Warren, the top Democrat on the Senate Banking Committee, said in a statement.

While the overall report appears positive at first glance, Northlight Asset Management's chief investment officer Chris Zaccarelli, expects skeptics to point out a "very meager increase of 50,000 in jobs."

"In essence, we are seeing validation of the idea that job creation is very weak and companies have been letting workers go at a slow pace," he said in a note.

"There aren't any red flashing lights indicating an imminent recession, but there are plenty of yellow warning lights flashing and there is the risk that we could approach stall speed."

While the unemployment rate crept down in December, this could partly be due to workers sidelined by a lengthy government shutdown between October and mid-November, economist Nancy Vanden Houten of Oxford Economics said in a note before Friday's report.

Firm jobs growth could also be a "red herring," warned EY-Parthenon chief economist Gregory Daco in a recent note.

"Broader labor-market indicators continue to signal deterioration," he said. "Overall, the labor-market narrative remains one of fragility, as firms prioritize cost control amid persistent uncertainty."

S.Leonhard--VB