Unemployment Rate Falls to 4.4% With Just 50,000 Jobs Added

The U.S. unemployment rate decreased to 4.4% in December, down from November’s revised 4.5% that marked a four-year high, signaling that the national labor market is entering 2026 in a stable yet subdued position. 

The December jobs report, released by the Bureau of Labor Statistics on Friday, showed that the economy added just 50,000 jobs at the end of last year, less than anticipated by the majority of economists.

The report offers the clearest snapshot yet of how the U.S. job market ended 2025, free from distortions tied to the government shutdown—the first since last September.

The sectors that posted the biggest gains in December were health care and hospitality and leisure, while retail recorded the steepest losses, shedding 25,000 jobs.

Meanwhile, revised figures for November showed that the economy gained 56,000 jobs instead of the previously stated 64,000, while revised data for October revealed a loss of 173,000 jobs, up from the 105,000 that were reported initially.

Overall, 2025 recorded the weakest employment growth outside of recessionary periods since 2003.

On a positive note, wage growth firmed in the private nonfarm sector, with average hourly earnings up 3.8% year over year.

"Overall, today’s messy report helps level-set expectations for 2026 for a low-hire, low-fire labor market that is still waiting for clearer signs of renewed momentum," says Realtor.com® senior economist Jake Krimmel.

For policymakers and markets, this readout all but confirms that the Federal Reserve will not be making any major moves during the next Federal Open Market Committee meeting scheduled for Jan. 28.

"The drop in unemployment and firm wage growth reduce any urgency to cut rates, even with hiring still modest," says Krimmel.

The economist forecasts that with inflation and real earnings data still ahead next week, the central bank is likely to remain in wait-and-see mode.

Financial markets now put the probability of the Fed holding interest rates steady at their current 3.5%-3.75% range at 95%, according to CME FedWatch.

For the housing market, implications from the latest jobs report are mixed but skewing positive.

"Mortgage rates have stabilized in recent weeks, and today’s data remind us that the foundation of housing demand is labor market stability and real income growth, not just near-term rate cuts," says Krimmel.

The pickup in real wage growth at the end of 2025 is a positive signal for workers and prospective homebuyers alike, even as affordability challenges weigh on activity.

As the Realtor.com December housing data showed, the market ended 2025 quietly and unevenly across regions.

Looking ahead to 2026, Krimmel says a steadier labor market with fewer downside risks would support household confidence and first-time buyer demand, especially as housing affordability has emerged as a priority for President Donald Trump's administration, with more creative policy proposals on the way.