The US labor market is stabilizing. Is the worst of the worst behind us?

The U.S. created 50,000 new jobs last December and the unemployment rate fell to 4.4% from 4.6% a month earlier, monthly data from The Bureau of Labor Statistics (BLS) showed.

In December, these indicators, as indicated in the BLS report, "virtually unchanged" (a month earlier, the growth of jobs in non-farm payrolls amounted to 64 thousand), but were less than the forecasts of economists surveyed by The Wall Street Journal and Reuters. The former expected job growth in the U.S. last month at 73,000 with unemployment at 4.5%, while the latter expected job growth of 60,000.

"Employment continued to trend up in food service, health care, and social assistance. Retail trade experienced a decline in jobs," BLS officials observed.

Published earlier this week, JOLTS' U.S. hiring report and ADP's private sector employment report last December showed that job growth in the world's largest economy, the U.S., is slowing.

"On the one, positive, side, I would say there are no signs of recession in the labor market, and that's a good thing," Sami Chaar, chief economist at Lombard Odier, commented to Reuters on the situation. - 'But on the more perhaps subdued side, there are also no signs of a strong acceleration in economic growth,' he added. "I think it's consistent with [indicators of] a relatively moderately growing economy," Chaar observed, emphasizing that this way there is "no overheating in the market, no growth above potential, no risk of recession." "There's nothing to worry about," the analyst stated.

Year-over-year job growth rebounded in December, perhaps indicating that "the worst of the slowdown is behind us," Bank of America's Institute (research arm) noted this week.

"The Fed is likely to stay the course for now as the labor market is tentatively showing signs of stabilization," Lindsay Rosner, head of multi-sector bond investments at Goldman Sachs Asset Management, commented on the BLS report to Bloomberg. - The unemployment rate has fallen, suggesting the November spike was caused by one-off delayed layoffs and data distortions rather than a sign of systemic weakness." At Goldman Sachs, she added, she expects the Fed to stay the course on rate cuts, "But still plan for two cuts before the end of 2026," Rosner noted.

"The jobs report is mixed," B. Riley Wealth chief market strategist Art Hogan also noted. Riley Wealth's Art Hogan. - We continue to see a situation where companies are slow to hire and slow to lay off employees. The main takeaway from today's report is that there is more good news than bad in the first timely employment report released in three months."

The yield on two-year Treasury bonds after the publication of reports rose by three basis points and amounted to 3.52%, Bloomberg writes. Contracts on the S&P 500 rose by 0.3%, futures on the Nasdaq 100 added 0.4% and the Dow Jones index rose by 0.3%.

The Fed has cited US employment and labor market data as a priority factor in interest rate decisions. Markets are now forecasting two Fed interest rate cuts this year. A strong monthly employment report could lead to a lowering of these expectations, Reuters pointed out.

The last time the BLS disclosed U.S. employment data for October and November 2025, the timely release of this information was delayed due to the government shutdown. The previous report showed an increase in jobs in November 2025 (+64 thousand) after a decrease of 105 thousand in October. The unemployment rate then rose to 4.6%, the highest in more than four years.

This article was AI-translated and verified by a human editor