US Labor Market Cools with 50K Jobs Added in December as Unemployment Falls to 4.4%

December Jobs Report Signals Slower Hiring

The US economy added **50,000 jobs** in December, falling short of the 60,000 forecast and below November's revised 56,000 figure. Employment gains were concentrated in food services (27,000 jobs), healthcare (21,000), and social assistance (17,000), while retail shed 25,000 positions.[1]

Revisions lowered October and November payrolls by 76,000 combined, bringing the yearly total to 584,000 jobs, or an average of 49,000 monthly—a sharp drop from 2024's 2 million gain.[1]

Unemployment Rate Dips Amid Shrinking Labor Force

The **unemployment rate declined to 4.4%** from 4.5%, with 278,000 fewer unemployed individuals, totaling 7.50 million. Employment rose by 232,000 to 163.99 million, but the labor force contracted by 46,000, pushing participation to 62.4%.[1]

The broader U-6 underemployment measure improved to 8.4% from 8.7%, suggesting some labor market resilience despite cooling trends.[1]

Consumer Sentiment Rises but Inflation Expectations Persist

University of Michigan's January consumer sentiment index climbed to **54.0**, beating expectations and marking gains among lower-income groups. However, it sits 25% below January 2025 levels due to ongoing price and job concerns.[1]

Year-ahead inflation expectations held steady at **4.2%**, a near one-year low but above last year's 3.3%. The five-year outlook ticked up to 3.4% from 3.2%.[1]

Private Sector Leaders Voice Optimism for 2026

Alfred Ortiz, CEO of Job Creators Network, highlighted a strong holiday shopping season with nearly **4% spending growth** year-over-year, countering fears of a weak consumer period. He noted a shift toward private sector growth under the Trump administration.[4]

Ortiz pointed to the loss of nearly 300,000 government jobs as a positive move to streamline bureaucracy, fostering a healthier private sector environment.[4]

Challenges in Credit Access and Interest Rates

Small businesses face hurdles with credit costs and availability, despite broad optimism. Ortiz indicated no further interest rate cuts are expected before Federal Reserve Chair Jerome Powell departs.[4]

• Consumers and small businesses seek lower rates to ease financial pressures.
• Private payroll data from ADP shows weakening, aligning with broader slowdown signals.[3]

Markets React to Softer Jobs Data

US equities hit records following the softer jobs print, with Europe rallying on miners and chips, and Asia steadying on China inflation news. This reflects investor bets on potential Fed easing amid cooling labor data.[1]