December jobs report will offer a final read on 2025 employment

As the steady flow of government data resumes after the longest shutdown in U.S. history, Friday’s jobs report will offer the final read on how the labor market performed in 2025.

The Bureau of Labor Statistics will return to its regularly scheduled release, with December payrolls and unemployment data set to be published at 8:30 a.m. ET.

Economists largely expect to see a rebound from the weakness seen in recent months.

Overall, the U.S. economy is expected to have added 73,000 jobs in December, with unemployment projected to nudge down to 4.5%, according to economists surveyed by Dow Jones.

In November, the unemployment rate rose to 4.6%, the highest since mid-2021, while the economy shed a combined 41,000 jobs across October and November.

Ahead of Friday’s release, however, the direction of the labor market since then was unclear.

According to the consulting firm Challenger, Gray, and Christmas, there were half as many layoff announcements in December as there were in November. December’s total announced layoffs were also down 8% from the same month a year earlier.

Meanwhile, for the week ending Jan. 3, the number of people filing for unemployment benefits came in lower than expected. That was a positive sign for economists watching closely for any further evidence that the labor market is cooling — but not cracking.

“Similar to the last few months, we expect mixed signals from the December employment report,” Citigroup economics analyst Veronica Clark said.

Morgan Stanley economists see a “stabilization” coming.

“Hiring has slowed from last year, but we do not see signs of faster layoffs,” they wrote Wednesday.

The Federal Reserve signaled at the end of last year that it expects to cut interest rates only once in 2026.

Mixed signals

Additional data from the private sector points to some recent stabilization in the jobs market.

Private employers added 41,000 jobs in December, according to the paycheck processing firm ADP, largely offsetting job losses of 29,000 in November.

Employers with fewer than 50 workers added jobs for the first time in four months, a notable development given that small businesses account for more than 40% of U.S. employment.

For many workers, however, 2025 was a year of uncertainty, marked by massive corporate layoffs, severe cuts to federal agencies and the wide-scale adoption of artificial intelligence at work.

Overall, employers announced more than 1.2 million job cuts during the year, nearly a 60% increase over 2024. Annual job cuts are now at their highest level since the pandemic.

The broader slowdown is also showing up in wage trends.

According to the Bank of America Institute, which analyzes data from nearly 70 million consumer and small-business clients, after-tax wage growth slowed across income groups in December, with the biggest slowdown showing up among middle- and higher-income households.

If wage growth continues to slow for middle- and higher-income earners, it could begin to weigh on consumer spending and economic growth in 2026, David Tinsley, chief economist at the Bank of America Institute, said on a call with reporters this week.

Consumer spending could prove especially sensitive to any shifts in the financial picture for high-income households, because they have been driving an outsized share of it recently.

For now, Tinsley said, it’s too early to draw broad-based conclusions about whether December’s slowing wage growth represents a long-term shift.