2025 wasn’t a good year for the labor market

Want a jobs report worth leaking? December’s wasn’t it.

On Thursday night, President Donald Trump leaked a graphic in an attempt to brag that the private sector accounted for all job growth in 2025, citing numbers that only added up when the Bureau of Labor Statistics published its normally highly protected monthly employment situation data some 12 hours later. While the president appeared keen to portray the latest jobs report (which has a significant influence on the stock market) as a victory for his administration, the December data was, well, mid.

Employers reported modest gains in December, while the unemployment rate edged down slightly. And taking the entire year into account, the labor market ended 2025 in a worse spot than when it started.

Diving into the data. Employers added 50,000 jobs in December, and 584,000 throughout the entire year. The average monthly gain was 49,000. That’s down significantly from 2024, when 2 million jobs were added, averaging to 168,000 per month.

And, while the private sector did account for all job gains as overall government employment declined, gains were primarily concentrated in healthcare, which employs nearly 15% of US workers.

“Pretty much all of our job gains has come from one sector of the economy,” Kory Kantenga, LinkedIn’s head of economics for the Americas, said, adding that healthcare workers and those in AI “have a great labor market.” Everyone is “facing a very competitive labor market, their workforce confidence is low.”

But even healthcare has seen a slowdown: It added 404,000 jobs in 2025, with monthly payroll gains averaging 34,000, well below the 56,000 reported in 2024.

The unemployment rate edged down slightly month over month, to 4.4% in December. But it’s also increased significantly from a year ago, when jobless rates hovered between 4% and 4.2% from June 2024 through April 2025. And the number of long-term unemployed (which the BLS counts a little after 6.2 months of joblessness) rose by 397,000 year over year.

While the monthly numbers came in below economists’ expectations of 4.5%, Kantenga said it was troubling that unemployment fell only slightly.

“These numbers fluctuate a lot, so we need a lot more evidence over time to say yes, this is a clear warning sign we should worry, but that did concern me, that those numbers didn’t really come down that much,” he said.

Additionally, the impact of joblessness isn’t being felt evenly. Youth unemployment rates, while declining month over month, were at 15.7% in December, up more than three percentage points from 12 months prior. And the unemployment rate for Black people had risen to 7.5%, up from 6.1% the year prior.

Moreover, while the labor force participation rate remained relatively unchanged year over year, women of color aged 20+ accounted for all exits from the labor force in December. Those exits were primarily concentrated among Black women and Latinas, who also saw increases in unemployment rates; labor force participation and unemployment improved for white women.

“From those numbers alone, we can see it’s women of color who were leaving the labor force last month,” said Jasmine Tucker, VP of research at the National Women’s Law Center. She said the unemployment rate for Black women—7.3% in December—is particularly worrying.

“The unemployment rate for Black women continues to climb,” Tucker said. “This continued climb continues to signal bad things to come. If the overall unemployment rate was at 7.3% and had been elevated like it has been for the last couple of years, we would be like the scream emoji, freaking out, and we’re not.”

She stressed the importance of ensuring diverse, equitable candidate pools during a period of high competition and DEI rollbacks.

“Employers, right now, are being choosy. There’s more people looking for work, and so they have a bigger applicant pool. But what it looks like is…who are they hiring? They’re hiring white men, white women, and they’re leaving behind a lot of really talented [people],” Tucker said.

Zoom out. While the topline numbers may look good—or just okay—on paper, it’s critical that employers take into account the subtleties as well.

“It comes back to some of the nuances that I think a lot of people are missing,” Tucker said.

While the current hiring lull in most sectors has given employers the opportunity to be choosier with their candidate pools, this current period can carry its own consequences. Workers are feeling pretty sour about their job prospects right now. That discouragement can force people to exit the labor market, costing employers talent, both sources warned.

Additionally, during periods of high competition, job seekers will remember how they were treated by employers—and share it with others.

“People remember. They remember the companies that didn’t get back to them. They remember the companies that did,” Kantenga said. “We talk amongst ourselves as workers. So reputation does still matter in a market where you're not hiring. So that’s something that if you’re not in those areas where things are tight, where there’s a lot of aggressive hiring happening, you have to keep that in mind.”