The labor market remains weak, according to the the Employment Situation report for December 2025 from the U.S. Bureau of Labor Statistics (BLS). In December 2025, employers added 50,000 new jobs, the unemployment rate fell to 4.4 percent, in part because people left the labor force, and the prior two months of new jobs were revised down by a total of 76,000 jobs. Amid Trump administration policies such as widespread tariffs, the overall economic picture is that of a soft labor market with fewer economic opportunities and more financial risks for workers.
The labor market was weaker than in 2024 by several measures, and this weakness shifted the burden of bad economic outcomes onto workers. The average unemployment rate was 4.2 percent in 2025 compared with 4 percent in 2024—5 percent higher in 2025 than in the previous year. Moreover, it took unemployed workers longer to find a new job: In 2025, the average length of unemployment was 23.1 weeks compared with 21.7 weeks in 2024—an increase of 6.4 percent. In December 2025 alone, the average length of unemployment was 24.4 weeks, the longest duration since August 2025.
Other BLS data through November 2025 further underscore the downside risks for workers. The average share of job openings relative to existing jobs was 4.4 percent for the first 11 months of 2025, down by 5.6 percent from the same period in 2024.
Workers have lost bargaining power and were thus in a weaker position to negotiate for higher wages or switch jobs in search of higher pay. Wages grew on average by 0.3 percent in December 2025 and were 3.8 percent higher than a year ago. This growth rate has slowed slightly throughout 2025, while inflation grew throughout the year. As a result, inflation-adjusted average wages for production nonsupervisory workers—the overwhelming majority of workers—in November 2025, the last month for which data are available, were only 1.1 percent higher than a year earlier, down from a peak 12-month growth rate of 1.9 percent in April 2025. The loss of worker bargaining power means less money in people’s wallets.
Read more
The risks of adverse economic outcomes are not equally shared among workers. In the second half of 2025, unemployment rates—averaged to reduce the influence of data fluctuations due to low response rates and the effect of the government shutdown—were higher for many population groups than in the first half of the year. For example, younger workers saw larger increases in their unemployment rates than older workers. The unemployment rate for workers 16 to 24 years old jumped by 0.8 percentage points from 9.6 percent in the first half of the year to 10.4 percent in the second half. The unemployment rate for workers 25 to 34 years old increased by 0.4 percentage points, while the unemployment rate for workers from 35 to 44 years old went up only by 0.2 percentage points during the same period.
There are also noticeable differences in in the unemployment experiences of Americans depending on their race and ethnicity. From the first half of the year to the second half, the unemployment rate for Black and Asian workers rose by 1.3 percentage points and 0.4 percentage points, respectively, compared with 0.1 percentage points for white and Hispanic workers. In December, the unemployment rate for Black workers was almost twice as high as that of white workers—7.5 percent compared with 3.8 percent. The slowdown in the labor market throughout 2025 hurt Black workers particularly hard.
Workers in some industries felt the labor market slowdown more acutely than others. Manufacturing hit a slump. It was down again in December 2025 by 8,000 jobs, and the sector employed 68,000 fewer people in December 2025 than in December 2024. Furthermore, construction employment, which is another bellwether of economic swings, lost 11,000 jobs in December 2025. The slide in federal government employment ended with a very small job gain of 2,000 new jobs. This sector employed 274,000 fewer people in December 2025 than a year earlier. Other sectors added jobs throughout the year and in December 2025, such as health care (+21,100 in December 2025), but those job gains were not enough to generate meaningful labor market momentum.
The total number of new jobs was 50,000 in December 2025, and the total number of new private sector jobs was 37,000. Average total monthly job growth in 2025 amounted to nearly 49,000 new jobs, with an average monthly increase of 82,833 jobs in the first half of the year and 14,500 new jobs per month in the second half. Private sector job growth mirrored this slowdown with an average monthly increase of 79,167 jobs per month in the first half and 43,000 monthly job gains in the second half. There were no signs of added private sector momentum to offset the Trump administration’s willy-nilly slashing of necessary public sector jobs.
The latest labor market data show a comprehensive view of 2025. Unemployment rose and employment growth fell. The stalling labor market eroded workers’ bargaining power, leaving them in a weaker financial position going into 2026.