US added fewer jobs than forecast in December
Newsflash: The US economy added fewer jobs than expected last month.
America’s non-farm payroll rose by 50,000 in December, missing forecasts of a 60,000 rise.
Employment continued to trend up in food services and drinking places, health care, and social assistance, the Bureau of Labor Statistics reports, while retail trade lost jobs.
That shows a hiring slowdown, compared with the previous month; the BLS now estimates that 56,000 jobs were created in November, 8,000 fewer than its first estimate of 64,000.
Key events
The rollout of artificial intelligence services could also be slowing demand in the jobs market.
Daniel Richard Vernazza, chief international economist at Unicredit, explains:
There are two main factors behind slower hiring: 1. economic uncertainty triggered by Trump’s policies, particularly on trade, which surged in April last year and led firms to delay hiring, waiting for greater clarity; and 2. the AI investment boom, which for many firms has substituted for the need to hire as much.
We expect heightened economic uncertainty to ease overtime but to remain high. Hiring should pick up modestly, either as uncertainty eases or simply because firms will become used to elevated uncertainty. Due to strong AI investment, we see employment having a lower elasticity to GDP than its historical relationship.
The unemployment rate may rise, but likely not by much amid the solid outlook for aggregate demand in the economy. There are no signs of the labour market falling into a downward spiral.
It appears that President Donald Trump posted some details from today’s jobs report last night on social media!
A post on Trump’s truth Social site around 14 hours ago declared that “Federal government jobs are down 277,000” since January, a fact that appears in today’s jobs report which was released just over 2 hours ago.
Bloomberg explains:
The chart, which showed the private sector added 654,000 jobs “since January,” matched figures that were not publicly published until 8:30 a.m. in Washington on Friday. It was posted on Truth Social about 12 hours before the data was set to be released.
The president is typically briefed on the numbers a day before their publication.
The jobs report is meant to be kept closely under wraps, given its reputation for moving the markets.
Here’s a screengrab of the post:
TRUMP SHARES UNRELEASED JOBS DATA ON SOCIAL MEDIA
President Trump posted a chart on Truth Social Thursday showing private-sector job growth of 654,000, figures not officially released until Friday morning. The post came roughly 12 hours before the December employment report’s… pic.twitter.com/R74udm2VaB
— *Walter Bloomberg (@DeItaone) January 9, 2026
Our US Politics Liveblog is covering the Supreme Court non-decision on tariffs:
Supreme Court will not rule on Trump tariffs today
Alas, we’re not going to get a ruling over the legality of Donald Trump’s trade wars today.
The U.S. Supreme Court will not issue a ruling on Friday in a major case which could test the legality of the sweeping global tariffs announced by President Donald Trump last year.
Today had been identified as the first day that the SCOTUS might give its ruling on whether the international Emergency Economic Powers Act (IEEPA) permits the imposition of widespread tariffs
US ‘prediction’ markets suggest there’s roughly only a 25% chance that SCOTUS will back Trump, when the decision comes, and a 75% probability that they will rule against the White House.
US consumer confidence rises
Consumer confidence has risen across America this month, despite lingering concerns about inflation and the jobs market.
The University of Michigan’s Index of Consumer Sentiment has risen to 54.0 this month, up from 52.9 in December. That’s its highest reading since last September.
Surveys of Consumers director Joanne Hsu explains:
Improvements in January were seen among lower-income consumers, while sentiment fell for those with higher incomes. All told, while consumers perceived some modest improvement in the economy over the past two months, their sentiment remains nearly 25% below last January’s reading.
They continue to be focused primarily on kitchen table issues, like high prices and softening labor markets. Although consumers’ worries about tariffs appear to be gradually receding, they remain guarded about the overall strength of business conditions and labor markets.
More than 90% of interviews for this release were collected prior to the capture of president Maduro in Venezuela, so we can’t yet see what impact that has had….
Daniel Casali, chief investment strategy at wealth managers Evelyn Partners, points out that the Trump White House’s immigration crackdown has slowed the jobs market this year:
“Monthly non-farm payrolls have slowed throughout 2025 due to a confluence of factors.
These include tighter immigration policies under the Trump administration and a wave of federal employees leaving their jobs after the Department of Government Efficiency offered early retirement and redundancy packages though the Federal Government Deferred Resignation Program.”
The latest market pricing confirms that a cut to US interest rates this month is very unlikely.
CME Group’s Fedwatch tool shows there’s a 95% chance that the US Federal Reserve leaves interest rates on hold at its meeting at the end of January, and just 5% chance of a quarter-point cut.
Wall Street has opened a little higher, as investors digest today’s US jobs report.
The Dow Jones industrial average has risen by 170 points, or 0.35%, at the start of trading to 49,436 points.
The broader S&P 500 share index is up almost 0.3%.
Chris Beauchamp, chief market analyst at IG, also predicts that US interest rates will be left on hold later this month, due to the drop in the jobless rate:
“Payrolls may have missed forecasts, and the revisions to October and November may have been brutal, but with unemployment falling to 4.4% it doesn’t seem like there’s too much stress in the US labour market.
This leaves us with the strong expectation that the Fed will hold rates in January, but remain with an easing bias. 2025 saw the weakest pace of job creation since 2020, but for now the recent weakness has abated.”
Strategist: January rate cut very unlikely following drop in jobless rate
Today’s drop in the US unemployment rate means there’s almost no chance of a cut to interest rates this month, argues Seema Shah, chief global strategist at Principal Asset Management, said:
“The prospect of a January Fed rate cut has all but vanished following the unexpected drop in the unemployment rate. It is now difficult to argue that the labour market is collapsing and in urgent need of monetary support.
However, the picture remains far from clear: payroll growth undershot expectations, and downward revisions to prior months have pushed the three-month moving average into negative territory. While a tighter labor supply may explain part of the dynamic, sustained job losses hardly inspire confidence.
The U.S. economy likely requires additional support from the Fed — just not immediately.”
Richard Carter, head of fixed interest research at Quilter Cheviot, says there’s little sign of an economic bounceback following the end of the US government shutdown:
“Today’s US employment situation print shows just 50,000 jobs were added in December.
This was below expectations of 60,000 and shows the labour market remains considerably more subdued than in recent years. Healthcare, social assistance, food services and drinking places were among the sectors driving much of the hiring, while retail saw job losses.
“The government shutdown resulted in a period of market labour market weakness, and today’s figures show there is yet to be much of a bounce back, though the unemployment rate saw a slight decline to 4.4% from a revised 4.5% previously. The data also outline the substantial drop in payrolls in 2025 compared to 2024, with just 584,000 jobs added last year compared to 2.0 million the year prior.
Where were jobs created in December?
More than half of the 50,000 jobs created in the US last month were at food services and drinking places, where payrolls rose by 27,000.
Health care continued to add workers in December; payrolls rose by 21,000, including 16,000 in hospitals.
Employment in social assistance rose by 17,000.
But it was a tougher jobs market in retail, where 25,000 jobs were cut.
Federal government employment rose by 2,000, suggesting that the Doge jobs cull may have abated – after 277,000 jobs were lost through 2025
Unemployment rate dips to 4.4%
America’s jobless rate has fallen, to 4.4% in December, down from 4.5% in November (which I think has been revised down from 4.6%)
Today’s employment data shows that the unemployment total dipped from 7.781m in November to 7.503m in December.
The number of people employed rose, month-on-month, but the labor force participation rate dipped from 62.5% to 62.4%, implying more people were neither in work nor looking for a job.
