On Friday morning at 8:30 a.m. Eastern Time, the Bureau of Labor Statistics (BLS) will publish its latest report on the United States employment situation, offering a fresh assessment of the labor market's health as 2025 draws to a close. Expectations among economists vary broadly regarding what December's figures will reveal about jobs growth for the final month of the year. The consensus forecast, drawn from FactSet estimates, anticipates an increase of approximately 55,000 positions. This projection highlights the subdued pace of hiring that has marked 2025, which has seen the slowest employment expansion in decades.
However, some economists propose that seasonal hiring trends characteristic of the holiday period might have inflated job gains for December beyond the consensus, with estimates exceeding 105,000 new jobs. Alongside job creation figures, the unemployment rate is expected to decline slightly to 4.5 percent after reaching a four-year high of 4.6 percent in November.
Despite these mixed metrics, public sentiment about employment prospects has eroded significantly. Heather Long, chief economist at Navy Federal Credit Union, emphasized the year’s weak labor market performance in a recent statement. "Total job gains for 2025 are on track to be a meager 710,000," Long noted. She added, "That’s the worst hiring outside of a recession since 2003. Even 2010, just after the Great Recession, experienced better hiring numbers than 2025." This perception aligns with findings from the Federal Reserve Bank of New York’s December Survey of Consumer Expectations, which reported a record low 43.1 percent probability among respondents that they will find employment, alongside rising fears of job loss reaching their highest level since April 2025.
The ongoing labor market conditions over the past year show significant lopsidedness across industries. Contributing factors include elevated uncertainty from sweeping policy shifts including tariff implementations, considerable changes to immigration patterns, and cautious engagement by companies exploring artificial intelligence integration. These elements have collectively restrained hiring or even caused reductions in workforce numbers in many sectors.
Amid these trends, the health care and leisure and hospitality industries stand out as exceptions due to their job growth. Health care employment has strengthened, supported by demographic shifts linked to an aging population. Leisure and hospitality have also benefited from spending enabled by higher-income consumers within the economy, reflecting a widening divide in economic experiences.
Nela Richardson, chief economist at payroll provider ADP, described this dichotomy: "Health services represent a costly part of consumer spending, while leisure and hospitality constitute discretionary expenditures. These trends are consistent with a K-shaped economic recovery driven primarily by higher earners." Together, these two sectors, which account for roughly 22 percent of total employment, were responsible for 84 percent of all job gains between January and November 2025.
The contrast is further accentuated when observing the period following April 2025. After then-President Donald Trump’s most expansive tariff announcement, business confidence deteriorated sharply, and uncertainty intensified. As a consequence, hiring plans were scaled back significantly. Between April and November, job growth in the health care and leisure and hospitality sectors alone surpassed the net employment increases across the entire labor market, underscoring the limited hiring elsewhere.
For most other parts of the economy, the labor market has resembled a "hiring recession," according to Heather Long. This assessment is supported by recent data published earlier this week. The latest Job Openings and Labor Turnover Survey (JOLTS) from the BLS revealed that in November, companies posted fewer open positions and hiring rates plunged to their lowest in over ten years, excluding pandemic disruptions. Conversely, layoff figures remained subdued alongside quit rates, indicating a cautious labor turnover environment.
A healthy labor market typically requires some level of hiring and firing to maintain dynamism. Currently, prolonged job searches reflect a labor market that functions less as an open opportunity space and more as an "exclusive club," where access to employment is challenging. This environment may extend the time it takes for individuals to secure new employment.
Despite challenges, certain signals suggest that the labor market's worst phase might be receding. According to data released Thursday by Challenger, Gray & Christmas, announced job cuts fell to a 17-month low in December, with employers planning 35,553 layoffs during the month—the lowest in a year. Simultaneously, hiring announcements for December reached their highest level since 2022.
Andy Challenger, the firm’s chief revenue officer, commented on these shifts: "The year closed with the fewest announced layoff plans all year; while December is typically slower, this coupled with increased hiring plans is a positive development following a year of elevated job-cut announcements." Additional insights from the Department of Labor indicate that approximately 208,000 individuals filed initial claims for unemployment benefits in the week ending January 3.
Complementing this, Bank of America data highlighted no notable increase in unemployment benefit payments among the bank's customers during December, pointing to stabilization. David Michael Tinsley, senior economist at the Bank of America Institute, offered an analysis based on these findings: "While the labor market remains in a mode of subdued hiring and firing, our data suggests the worst of the slowdown may be behind us." This cautiously optimistic outlook may indicate a turning point following the protracted softness seen throughout much of 2025.