The United States experienced its weakest year of job growth since the pandemic began, with employers adding just 584,000 jobs throughout 2025, according to recent labor data.
December capped off the anemic year with only 50,000 new jobs added nationwide, as reported by the Bureau of Labor Statistics. This represents a dramatic slowdown compared to the 2 million jobs created in 2024, making 2025 the worst year for employment growth since 2020.
“The big story is about the final benchmark revisions. With the downward revisions to prior data, the labor market added only 181,000 jobs total in 2025, just 15,000 per month on average,” noted Economic Policy Institute senior economist Elise Gould.
The slowdown became particularly pronounced in the latter half of the year. From May through December, hiring averaged just 12,000 jobs per month, compared with 123,000 from January through April, according to U.S. Bank’s analysis.
Despite the hiring slowdown, the unemployment rate actually improved slightly to 4.4% in December, down from a revised 4.5% in November. This suggests a “slow hiring, slow firing” environment where employers are retaining existing workers but hesitant to add new positions.
Manufacturing has been particularly hard hit, losing 8,000 jobs in December alone and remaining in a slump for the past 10 months according to the Institute for Supply Management.
The federal government has seen dramatic workforce reductions, shedding 277,000 jobs since the beginning of 2025. This includes 324,000 jobs lost since January 2025, according to EPI analysis.
In response to the weakening job market, the Federal Reserve reduced its federal funds target rate by 0.75% over the final three meetings of 2025. Markets are now pricing in expectations for two to three more cuts in 2026.
While job openings remain at around 7.1 million, the cooling labor market has made workers increasingly nervous about job security. A recent survey by the Federal Reserve Bank of New York found workers more worried about losing their jobs and less confident about finding new positions if laid off.
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