Job growth continued to slow at the end of the year, reinforcing signs of a cooling labor market. Nonfarm payrolls increased by 50,000 jobs in December, while the unemployment rate edged down slightly to 4.4%. With only 584,000 jobs added over the course of the year, 2025 marked the weakest annual job growth since 2003, excluding the recession years of 2008, 2009 and 2020. December’s job gains were led by food services, health care and social assistance, while retail trade and construction experienced job losses.

Wage growth accelerated in December, rising 3.8% year over year. This marked a 0.2 percentage point increase from the previous month, though it still remained 0.2 percentage points lower than a year ago. Wage growth has been outpacing inflation for nearly two years, which typically occurs as productivity increases.

National Employment

According to Employment Situation Summary reported by the Bureau of Labor Statistics (BLS), total nonfarm payroll employment rose by 50,000 in December, following a downwardly revised gain of 56,000 jobs in November. Through December, average monthly job growth in 2025 stood at just 49,000, well below the 168,000 monthly average recorded in 2024.

Payroll estimates for the previous two months were revised lower. October’s growth was revised down by 68,000, from -105,000 to -173,000. November job growth was revised down by 8,000, from +64,000 to +56,000. Combined, these revisions erased 76,000 jobs from previously reported figures.

The unemployment rate edged down slightly to 4.4% in December, following a downward revision of 4.5% in November. Over the month, the number of persons unemployed declined by 278,000, while the number of persons employed increased by 232,000.

Meanwhile, the labor force participation rate—the proportion of the population either looking for a job or already holding a job—decreased by 0.1 percentage points to 62.4%. This remains below its pre-pandemic level of 63.3% recorded at the beginning of 2020. Among prime working-age individuals (aged 25 to 54), the participation rate was unchanged at 83.8%, the highest level since September 2024.

Industry-level data further point to a cooling market. Leisure and hospitality added 47,000 jobs in December, while health care and social assistance employment increased by 38,500. In contrast, retail trade and construction posted job losses as well as several other major industries including manufacturing, trasportation and warehousing, and professional and business services, suggesting that hiring softness is broadening across the economy.

Construction Employment

Employment in the overall construction sector declined by 11,000 jobs in December, after a downwardly revised gain of 22,000 in November. Within the industry, residential construction shed 3,100 jobs, while non-residential construction lost 7,800 positions.

Residential construction employment now stands at 3.3 million in December, including 952,000 workers employed by builders and remodelers and approximately 2.4 million residential specialty trade contractors.

The six-month moving average of job gains for residential construction remains negative, at a loss of 3,017 per month, reflecting losses in four of the past six months. Over the last 12 months, residential construction has seen a net loss of 41,400 jobs, marking the eighth consecutive annual decline and the longest stretch of annual losses since the Great Recession. Since the low point following the Great Recession, residential construction has gained 1,336,100 positions.

In December, the unemployment rate for construction workers rose to 5.3% on a seasonally adjusted basis. While higher than in recent months, the rate remains relatively low compared with historical norms.