US job growth slows in December – NFP

US nonfarm payrolls increased by 50,000 jobs in December, compared to a downwardly revised 56,000 (down from 64,000) in November and disappointed forecast for 66,000 jobs added.

Unemployment rate, on the other hand, dipped to 4.4% last month from 4.5% in November (downwardly revised from 4.6% ) and missed 4.5% consensus.

Slower than expected job growth in December was mainly driven by more cautious approach by businesses, due to uncertainty over the impact of import tariffs on the labor sector and rising investments into artificial intelligence.

December’s employment report suggested the labor market remained at the back foot, after it lost momentum in 2025, mainly due to aggressive trade and immigration policies, which reduced both demand for and supply of workers.

Economists expect that labor market is continuing to struggle, as two key factors – negative impact from tariffs and AI preventing companies from hiring more workers, will continue to challenge the labor market.

The US Federal Reserve cut its benchmark interest rate by 25 basis points to the 3.50%-3.75% range in December, but officials signaled they were likely to pause further reductions in borrowing costs for now to get a better sense of the economy’s direction, as weakening labor sector counters positive numbers from economic growth and worker productivity in the third quarter that would make stimulation of job growth by rate cuts less effective.