December Jobs Report Shows Lower Than Expected Rise In Payrolls, Unemployment Rate Inches Lower

• Analysts expected an addition of 73,000 payrolls during the month.
• The BLS also revised October and November payrolls, with the net change in employment for the two months being lower by 76,000 than initially reported.
• While health care continued to trend up in payroll additions, retail trade jobs declined in December.

Nonfarm payrolls rose lower than expected by 50,000 in December, according to the latest report from the Bureau of Labor Statistics (BLS).

Analysts expected an addition of 73,000 payrolls during the month, according to Dow Jones data cited by MarketWatch. This comes after a higher-than-expected addition of 56,000 jobs in November, revised downward from the previously reported addition of 64,000 roles.

The unemployment rate for December came in lower than expected, at 4.4%, compared to an estimate of 4.5%. The unemployment rate for November was revised downward to 4.5%, from the previously reported 4.6%, BLS data showed.

The jobs report comes nearly three weeks ahead of the Federal Open Market Committee’s (FOMC) meeting, which is scheduled for January 27 and 28. According to data from the CME FedWatch tool, the probability of the Fed keeping rates unchanged has increased to 97.2%, compared to 88.9% a day ago.

Mohamed El-Erian, Chief Economic Advisor at Allianz, stated in a post on X that this jobs report has something for everyone, leaving markets largely unchanged.

“In terms of the monetary policy takeaway, this job report is likely to reinforce Chair Powell’s view that the Federal Reserve is ‘well-positioned,’ giving the central bank time to wait before cutting rates again,” he said.

Downward Revision For October

BLS also revised the October payrolls number down by 68,000, showing a lower reduction in jobs at 105,000. The previous report stated there was a decline of 173,000 jobs during the month.

Overall, the net change in employment for October and November is lower by 76,000 than initially reported.

Unemployment Rate Falls Across Categories

The unemployment rate fell across categories in December compared to a month earlier. The jobless rate among teenagers was the highest at 15.7%, but it was down 60 basis points from November.

Source: Bureau of Labor Statistics

Food Services, Health Care Drive Gains

The BLS jobs report also revealed that while health care continued to trend up in payroll additions, retail trade jobs declined in December.

Food services and drinking places added 27,000 jobs, health care jobs grew by 21,000 during the month, while social assistance added 17,000 roles.

Retail trade saw a decline of 25,000 jobs, while warehouse employment fell by 19,000 roles.

Average hourly earnings for all employees on private nonfarm payrolls edged up by 12 cents to $37.02. Over the past 12 months, average hourly earnings have risen by 3.8%.

Meanwhile, U.S. equities gained in Friday’s pre-market trade. At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was up by 0.39%, the Invesco QQQ Trust ETF (QQQ) rose 0.52%, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) gained 0.3%. Retail sentiment around the S&P 500 ETF on Stocktwits was in the ‘neutral’ territory.

The iShares 7-10 Year Treasury Bond ETF (IEF) was up 0.12% at the time of writing.

Also See: World's Top 25 Richest Families Added More Wealth Over Past Year Than Musk, Bezos, Ellison, Huang, And Buffett's Gains In 2025: Report

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