The unemployment rate did not worsen, even improving slightly as payrolls made gains in December, too, new government employment figures show.
The unemployment rate eased from 4.6% in November to 4.4% last month, as payrolls grew by 50,000 jobs. The data suggests that a labor market that cooled significantly over the course of 2025 is in much the same state as it’s been in for months, and unlikely to crumble anytime soon.
Jobs data released Friday by the Bureau of Labor Statistics (BLS) included revisions to earlier estimates for October and November employment, a period covering the government shutdown that lasted from Oct 1. to Nov. 12, during which time government data collection and reporting offices were closed.
October payroll employment was revised down by 68,000 jobs, from a net loss of 105,000 to 173,000, while November totals were lowered by 8,000, from previously estimated net gains of 64,000 to a revised 56,000. The months’ combined jobs revision was 76,000 lower.
Retail trade lost jobs over the holiday season, while gains “continued to trend up” in food services and drinking places, health care and social assistance, BLS said in its December employment summary.
The number of people who were jobless for less than five weeks was 2.5 million in November, a jump of 316,000 from September. That number fell back to 2.3 million in December.
Friday’s release comes on the heels of Wednesday’s update to the job openings and turnover survey (JOLTS) for November, which showed job openings fell by about 300,000 to 7.1 million, an aggregate 885,000 fewer in November over the course of the year.
“The low churn environment has underpinned a tenuous balance between labor demand and labor supply,” a team of Wells Fargo economists wrote about the JOLTS data in a market commentary. “With firms still cautious about expanding headcount, we expect job growth to remain subdued.”
Economists polled by FactSet had forecast December job gains of 55,000, rendering the initial government estimate of 50,000 gains modest if not market-shifting. That signal was reinforced by data released this week by payroll processing firm ADP, which showed private employers added 41,000 jobs in December, up from a loss of 29,000 in November.
In commentary shared with Scotsman Guide, Mike Fratantoni, chief economist at the Mortgage Bankers Association (MBA), said the December hiring rate was in line with the monthly average of 49,000 for the year, but much slower than the monthly pace of 168,000 in 2024.
“This report is fairly neutral with respect to its implications for the housing and mortgage markets,” said Fratantoni. “It reinforces the sense that the economy is slowly growing but does not increase the urgency for additional rate cuts.”
From a data perspective, the Federal Reserve and markets are still playing catch-up from the government shutdown. New-home sales and permitting data that had not been updated by the U.S. Census Bureau since August was just released Friday. The data that emerges, experts have cautioned, may show a degree of data degradation.
With its first Federal Open Market Committee (FOMC) meeting of 2026 — and subsequent rate-cut decision — scheduled for Jan. 27 and 28, markets currently expect the federal funds rate to remain unchanged to start the year, with labor market resilience still apparent.
“For the Federal Reserve, this mix supports a cautious pause at the January FOMC meeting, especially with officials split between inflation-focused hawks and more growth- and jobs-focused doves,” said Sam Williamson, senior economist at title insurance giant First American Financial Corp., in remarks shared with Scotsman Guide.
The U.S. central bank lowered its benchmark borrowing rate by 0.75% over the three months spanning September to December, leaving officials “inclined to give those moves time to work through the system before making additional adjustments,” he added.
That could mean mortgage rates remain near current levels in the low-6% range — three-year lows — for the foreseeable future.
“Mortgage rates are at their lowest level in 15 months, home price growth is slowing and inventory is on the rise,” said Lisa Sturtevant, chief economist of Bright MLS, in a statement shared with Scotsman Guide. These trends point to improved affordability, which could invite more homebuyers into the market, she says.
In the mortgage market, however, optimism for a stronger spring homebuying season must translate to greater certainty among buyers, who proved cautious in 2025 amid wide-ranging economic and political uncertainties.
“There is still a lot of pent-up demand in the market and it’s an open question still about what is going to win out — improved affordability or economic uncertainty,” said Sturtevant.
