U.S. job growth likely accelerated in January, supported by fewer layoffs in several seasonal industries. Still, economists say the broader labor market remains subdued, weighed down by uncertainty over trade policy and tighter immigration enforcement that has limited worker availability.
The Labor Department’s closely watched employment report is also expected to show the unemployment rate holding steady at 4.4 percent last month, with annual wage growth moderating further.
Eurozone economy maintains modest growth in January as business confidence strengthens
Trade and immigration policies cloud hiring outlook
Economists point to lingering uncertainty over import tariffs as a key factor dampening business confidence and hiring decisions. At the same time, stricter immigration enforcement has constrained labor supply in certain sectors, adding another layer of complexity to workforce planning.
While the Trump administration’s trade and immigration policies have contributed to a cooling labor market, some economists expect proposed tax cuts to provide a boost to hiring later this year.
White House economic adviser Kevin Hassett said recently that job gains could slow in the coming months due to weaker labor force growth and stronger productivity. His comments feed into an ongoing debate at the Federal Reserve over how the evolving labor market will influence upcoming monetary policy decisions.
Hiring slows sharply from pre-pandemic pace
Recent job growth has fallen well below pre-pandemic norms. Payrolls expanded by an average of 53,000 jobs in November and December combined, a stark contrast to the average monthly gain of 183,000 during the decade preceding COVID-19. Hiring was even more robust during the employment surge in the later years of the Biden administration.
The slowdown underscores the cooling momentum in the labor market as employers navigate economic and policy uncertainty.
December 2025 jobs report: A recap
In December, total non-farm payroll employment changed little, rising by just over 50,000 jobs. Employment gains were concentrated in food services, healthcare, and social assistance, while retail trade shed jobs.
For 2025 as a whole, payroll employment increased by 584,000, averaging 49,000 jobs per month. That marked a sharp slowdown from 2024, when payrolls grew by 2.0 million jobs, or an average of 168,000 per month.
Sector highlights
Food services
Employment in food services continued to trend upward in December, adding 27,000 jobs. Over the course of 2025, the sector added an average of 12,000 jobs per month, roughly in line with the 11,000 monthly average seen in 2024.
Healthcare
Healthcare employment rose by 21,000 jobs in December, including a gain of 16,000 positions in hospitals. However, the sector’s overall pace of hiring slowed in 2025, with average monthly gains of 34,000 jobs compared to 56,000 per month in 2024.
Social assistance
Employment in social assistance increased by 17,000 in December, driven largely by a 13,000-job gain in individual and family services.
