Did America’s job market “rebound” in December? A surprising media outlet offered that possibility in analyzing the latest jobs report from the Bureau of Labor Statistics.
First, let’s take a look at the numbers. The US only added 50,000 in December, in a year that generated the fewest number of jobs since recession-ridden 2003. However, the unemployment rate edged down, and other metrics still look positive, if not exactly impressive:
Both total nonfarm payroll employment (+50,000) and the unemployment rate (4.4 percent) changed little in December, the U.S. Bureau of Labor Statistics reported today. Employment continued to trend up in food services and drinking places, health care, and social assistance. Retail trade lost jobs. …
The number of people jobless less than 5 weeks edged down to 2.3 million in December. The number of long-term unemployed (those jobless for 27 weeks or more) changed little over the month at 1.9 million but is up by 397,000 over the year. The long-term unemployed accounted for 26.0 percent of all unemployed people in December. (See table A-12.)
Both the labor force participation rate, at 62.4 percent, and the employment-population ratio, at 59.7 percent, changed little in December. These measures have shown little change over the year. (See table A-1.)
The number of people employed part time for economic reasons, at 5.3 million, changed little in December but is up by 980,000 over the year. These individuals would have preferred full-time employment but were working part time because their hours had been reduced or they were unable to find full-time jobs. (See table A-8.)
In further negative news, BLS revised the numbers from the previous two months downward by 76,000. That wipes out the additions this month and makes a dreadful October look even worse, with a loss of 173,000 jobs, mainly attributable to the shutdown. That put average job growth at less than 50K in 2025, and that doesn’t measure up well in historical terms:
JUST IN: The U.S. economy added only 50,000 jobs in December and a meager 584,000 jobs in all of 2025. That’s the worst year for job gains outside of a recession since 2003. And nearly 85% of the job gains happened by April. There was little hiring the rest of the year.… pic.twitter.com/bTsUBYDkzy
— Heather Long (@byHeatherLong) January 9, 2026
However, wage growth remained relatively strong, rising 0.3% month-on-month in December, and growth remained well above the CPI Index inflation rate at 3.8%. That indicates a tight labor market despite the lack of net job growth. How can that be? It’s still possible that exiting illegal workers are being replaced by legal workers, resulting in a lack of net growth but remaining a still-robust labor market.
We’re not talking marginal numbers here either. DHS estimates that over 2.5 million illegal aliens have left the US in 2025. Even if their participation rate were half that of the rest of the population, that’s still 750,000 jobs that would have been left behind, assuming the DHS data is accurate. That would explain why (a) wage growth remains above the inflation rate, and (b) the unemployment rate has barely budged at all, even with job creation numbers that would normally be well below maintenance levels otherwise.
That could be the subtext for the way NBC News (!) framed today’s report – as a “rebound”:
The U.S. economy added 50,000 jobs in December, a moderate improvement after hiring cratered in October and rebounded only slightly in November.
After posting an average of only 48,000 jobs per month, after revisions, through the first 11 months of the year, the employment numbers could be a sign that the worst has passed.
NBC also looked at the layoff picture, which has brightened considerably over the last two months:
Executive search firm Challenger, Gray & Christmas said Thursday there were half as many layoff announcements in December as there were in November, and were down 8% from a year earlier.
Meanwhile, the number of Americans filing for unemployment benefits came in lower than expected for the week ending Jan. 3, a positive sign as economists watch for further evidence that the labor market is cooling but not cracking.
On the other hand, job openings are down significantly from a year earlier, the Wall Street Journal noted. And the overall economy certainly has given no signs of a recession – quite the opposite, in fact:
In a sign of cooling labor demand, the number of job openings was down nearly 900,000 in November compared with a year earlier, the Labor Department said earlier this week. Hiring and layoffs remained low, underscoring employers’ unwillingness to either take on or lay off workers. …
But even though the U.S. jobs market has been flagging, the economy has been growing at a steady clip, despite a blip in the first quarter. In the third quarter, the most recent quarter for which data is available, gross domestic product grew at its fastest pace in two years, thanks to strong consumer spending and solid business investment in artificial intelligence. Productivity, a crucial determinant of the economy’s long-term health, increased at its fastest pace in two years in the third quarter.
The shift of illegal workers out of the economy is the likeliest explanation for the data in the aggregate. If so, then the job creation numbers should start ramping up soon as the immigration situation stabilizes. The overall economy is strong, and that is not possible in a truly stalled labor market. Stay tuned.
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