According to the most recent U.S. Bureau of Labor Statistics Employment Situation Report, the U.S. economy added 50,000 jobs in December 2025, well below economists’ expectations. The unemployment rate declined to 4.4%. Job growth occurred primarily in food services and healthcare. For the full year, payroll employment increased by 584,000 positions, the smallest annual gain since 2010, excluding the pandemic year.

The December ADP National Employment Report indicates that the Western United States lost 61,000 jobs in a single month. Nearly all of these losses were concentrated in the Pacific region’s technology and professional services sectors, which declined by 59,000 positions. These losses coincide with continued reductions in white-collar support and middle-management roles as firms increase the use of automation and AI to drive efficiency.

Labor demand continued to decline late in the year. The most recent U.S. Bureau of Labor Statistics Job Openings and Labor Turnover Survey (JOLTS) report shows U.S. job openings fell to approximately 7.1 million in November, nearly 900,000 fewer than a year earlier, and the lowest level in 14 months. There were 0.91 job openings for every unemployed worker, the lowest ratio since March 2021. Employers with 50 to 999 employees accounted for most of the decline in job postings.

Despite fewer job openings, employers have not carried out broad layoffs. Hiring and separations both remained limited, resulting in low overall workforce movement. The quit rate remained unchanged at 2.0% in November, a level last observed during the post–Great Recession recovery period.

Wage growth slowed unevenly across income groups. Data from the Bank of America Institute shows that in December, higher-income households experienced after-tax wage growth of 3.0%, while middle-income households saw growth of 1.5%, the lowest level since May 2024. Lower-income households experienced after-tax wage growth of 1.1%.

Throughout 2026, economists expect private payroll growth to remain modest, with monthly gains averaging approximately 50,000 jobs. We remain hopeful that labor market conditions will become more favorable relative to 2025. Stage 4 Solutions will remain committed to supporting organizations as they manage priorities and address skill gaps while helping professionals find meaningful career opportunities.