**December Jobs Report Signals Cooling, But No Break in the Labor Market**
U.S. employers added 50,000 jobs in the most recent reporting month, falling short of the consensus estimate of 55,000. Adding to signs of a cooling labor market, November payrolls were revised downward from 64,000 to 56,000, continuing a trend of lower-than-expected revisions in recent employment data.
Despite the weaker jobs number, the unemployment rate fell to 4.4% from 4.6%, partially offsetting concerns. The Labor Department also revised November’s unemployment rate downward by 0.1 percentage point to 4.5%, citing annual updates to its seasonal adjustment methodology.
Revisions to earlier months further highlight the slowdown in hiring. October payrolls were reduced by 68,000, largely due to the roll-off of temporary federal workers, resulting in a net loss of 173,000 jobs for that month.
For policymakers at the Federal Reserve, the decline in the unemployment rate may offer reassurance that the labor market is not in freefall. However, the slower pace of hiring reinforces the view that the labor market is cooling. Having already delivered three quarter-point interest rate cuts in the second half of 2025, the Fed has indicated it can afford to proceed cautiously as it balances labor market softness against persistently high inflation. The next Fed policy meeting is scheduled for later this month.
Financial markets appeared to take the report in stride. Equities edged higher, while expectations for additional rate cuts were little changed.
