Washington, D.C. — New federal data show that the U.S. labor market lost momentum throughout 2025, leaving workers with fewer opportunities, weaker bargaining power, and growing financial risk as the year came to a close, according to a new analysis from the Center for American Progress.
The Bureau of Labor Statistics’ Employment Situation report for December 2025 shows employers added just 50,000 jobs, while the unemployment rate fell to 4.4 percent in part because workers exited the labor force. At the same time, job growth in the prior two months was revised down by 76,000 jobs. Taken together, the data point to a soft and stalling labor market shaped by Trump administration policies—including widespread tariffs and cuts to public sector employment—that have shifted economic risk onto workers.
“By the end of 2025, workers were clearly in a weaker position than a year earlier,” said Christian E. Weller, senior fellow at the Center for American Progress and author of the analysis. “Slower job growth, longer unemployment spells, and easing wage gains all point to a labor market that is failing to deliver security or opportunity for working families as they head into 2026.”
CAP’s analysis finds:
- Job growth slowed sharply over the course of the year. Average monthly job growth fell from more than 82,000 jobs in the first half of 2025 to just 14,500 jobs per month in the second half. December’s 50,000 jobs underscore the lack of momentum.
- Unemployment lasted longer for job seekers. The average length of unemployment rose to 23.1 weeks in 2025, up from 21.7 weeks in 2024.
- Workers lost bargaining power as job openings declined. Job openings averaged just 4.4 percent of total employment during the first 11 months of 2025, down 5.6 percent from the same period in 2024, making it harder for workers to switch jobs or negotiate higher pay.
- Wage growth slowed while inflation continued. Nominal wages rose 3.8 percent over the year, but inflation-adjusted wages for production and nonsupervisory workers grew just 1.1 percent in November 2025.
- Young workers and workers of color were hit hardest. Unemployment rates rose more sharply in the second half of the year for younger workers and for Black and Asian workers. In December, Black unemployment stood at 7.5 percent, nearly double the rate for white workers.
- Key industries showed signs of strain. Manufacturing shed 68,000 jobs over the year, construction lost jobs in December, and federal employment remained down by 274,000 jobs compared with a year earlier.
The December report closes out a year marked by rising unemployment, slowing job growth, and eroding worker leverage. As 2026 begins, workers are entering the new year with fewer economic protections and less room to weather further economic shocks.
Read the analysis: “December Jobs Day Closes a Year of a Stalling Labor Market” by Christian E. Weller
For more information or to speak with an expert, please contact Christian Unkenholz at [email protected].