The labor market’s struggles continued as 2025 ended. Here are five things we learned from U.S. economic data released during the week ending January 9.
1. Payroll growth was sluggish in December. Nonfarm payrolls expanded by a seasonally adjusted 50,000 jobs, just below November’s 56,000 gain and better than the 173,000 jobs lost in October. The Bureau of Labor Statistics also downwardly revised its October and November payroll estimates by a combined 76,000. For the year, payrolls grew by 584,000, sharply below 2024’s 2.024 million job gain. During the month, the private sector added a mere 37,000 jobs, with leisure/hospitality (+47,000) and health care/social assistance (+38,500) among the few bright spots. Retailers cut 25,000 workers. The average weekly earnings of $1,266.08 was up 3.8 percent from a year earlier.
A separate household survey shows the unemployment rate at 4.4 percent (down 1/10th of a percentage point from November). The civilian labor force contracted by 46,000, with the labor force participation rate slipping 1/10th of a percentage point to 62.4 percent. The 25 to 54 labor force participation rate held steady at 83.8 percent. The typical length of unemployment surged by 1.6 weeks to 11.4 weeks, with 41.9 percent of unemployed people out of work for at least 15 weeks. The number of part-time workers for economic reasons decreased by 146,000 to 5.341 million. The broadest measure of labor underutilization (the U-6 series) fell by 3/10ths of a percentage point to 8.4 percent.
2. November experienced declines in both hiring and job openings. The Bureau of Labor Statistics estimates that there were a seasonally adjusted total of 7.146 million unfilled jobs, a decrease of 303,000 from the previous month and an 11.0 percent from a year earlier. Private sector employers were looking to fill 6.451 million jobs, down 214,000 from October 2025 and 10.0 percent from a year earlier, including at least a million unfilled positions in health care/social assistance, professional/business services, and trade/transportation/utilities. Employers hired 5.115 million people in November, which is 153,000 fewer than in October 2025 and 3.6 percent less than in November 2024. Private sector employers hired 4.832 million workers. During the same period, 5.080 million workers separated from their jobs, an increase of 11,000 for the month and essentially unchanged from a year earlier. This included 3.161 million people quitting their jobs, up 188,000 for the month, and 1.687 million layoffs, a decrease of 163,000 for the month.
3. The manufacturing sector continued to struggle in December. The Manufacturing PMI decreased by 3/10ths of a point to 47.9. The Institute for Supply Management’s (ISM) index has not exceeded 50.0 for ten straight months (and the 36th time in the last 38 months), indicating a contracting manufacturing sector. While components for new orders (47.7) and employment (44.9) improved (but still showed contraction), those for production (51.0) and inventories (45.2) declined. Only two manufacturing industries reported growth in December: electrical equipment/appliances and computer/electronic products. Fifteen other industries contracted during the month.
4. The service sector expanded more rapidly in December. The ISM’s Services PMI rose 1.8 points to 54.4. The index has been above the 50.0 threshold for expansion/contraction for three straight months and ten times in 2025. Components for business activity/production (56.0), new orders (57.9), employment (52.0), and inventories (54.2) improved. Eleven service industries expanded during the month, led by retail, finance/insurance, and accommodation/food services.
5. The trade deficit plummeted in September. Exports increased by 2.6 percent to $302.0 billion, while imports decreased by 3.2 percent to $331.4 billion. The resulting trade deficit of -$29.4 billion (-39.0 percent compared to September 2025) was the smallest for the Census Bureau and Bureau of Economic Analysis data series since 2009. Year-to-date, the trade deficit of -$782.8 billion was 7.7 percent higher than the deficit during the first nine months of 2024. The goods deficit dropped by $19.2 billion to -$59.1 billion, while the services surplus shrank by $0.4 billion to $29.8 billion. This mainly reflects a significant increase in industrial supplies and materials (especially nonmonetary gold and other precious metals) and a rapid decline in pharmaceutical importation. The U.S. recorded its largest goods deficit with Mexico, Taiwan, and Vietnam.
Other U.S. economic data released over the past week:
- Jobless Claims (Week ending January 3, 2026, First-Time Claims, seasonally adjusted): 208,000 (+8,000 vs. the previous week, +3,000 vs. the same week a year earlier). 4-week moving average: 211,750 (-0.9% vs. the same week a year earlier).
- University of Michigan Surveys of Consumers (January 2026-preliminary, Index of Consumer Sentiment (1966Q1=100), seasonally adjusted): 54.0 (December 2025: 52.9; January 2025: 71.7).
- Vehicle Sales (December 2025, Autos and Light Trucks, seasonally adjusted annualized rate): 16.022 million (+1.9% vs. November 2025; -4.9% vs. December 2024).
- State Employment (November 2025, Nonfarm Payrolls, seasonally adjusted): Unchanged vs. October 2025 in 50 states and the District of Columbia. Increased vs. November 2024 in 12 states and the District of Columbia and unchanged in 38 states.
- Housing Starts (October 2025, Privately-Owned Housing Starts, seasonally adjusted annualized rate): 1.246 million units (-4.6% vs. September 2025; -7.8% vs. October 2024).
- Consumer Credit (November 2025, Outstanding Consumer Credit Balances Net of Real Estate, seasonally adjusted): $5.085 trillion (+$4.2 billion vs. October 2025; +0.5% vs. November 2024.
- Productivity (2025Q3-preliminary, Nonfarm Business Labor Productivity, seasonally adjusted annualized rate): +4.9% vs. 2025Q2; +1.9% vs. 2024Q3).
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What We Learned About the U.S. Economy Last Week 