One year in, a ‘ho-hum’ jobs report

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(The Center Square) – December’s jobs data changed little from November, rounding out an underwhelming year for the U.S. labor market. 

Initial estimates put job gains at 50,000, though if December is like every other month this year, that number will be revised downward in the coming months. 

By comparison, last December saw an increase roughly 6.5 times greater, with 323,000 jobs added from the previous month. Payrolls rose by an estimated 269,000 from November to December 2023, while pre-pandemic December 2019 posted nonfarm employment growth of 127,000 jobs.

Bruce Yandle, an adjunct fellow at George Mason University’s market-oriented Mercatus Center, described it as “ho-hum.”

“We have about the same level of total employment here in December as we had in January, when the year was starting. And so in a sense, when you look at the report and stare at it… it looks like the world is flat,” Yandle told The Center Square.

The year started off stronger than it finished, with monthly job creation exceeding 100,000 January through April. But May added fewer than 20,000 jobs, and payrolls shrunk by 13,000 from May to June. The rest of the year was inconsistent — modest gains mixed with outright losses.

The latest Job Openings and Labor Turnover Survey provided a sobering glimpse into the realities of the current job market, according to Dave Hebert, a senior research fellow at the American Institute for Economic Research. The JOLTS report reflected a low-hire, low-fire market.

“We’ve been told that a lot of new jobs are going to be coming,” Hebert said. “The claim was that by Q4 of 2025, the economy would be humming.”

GDP growth did accelerate, however, from 3.8% to 4.3% in the third quarter, though fourth quarter growth has yet to be released. But GDP growth is of limited practical value if it doesn’t translate into more jobs.

“We don’t eat GDP growth rates. People work,” Hebert said. 

A cooling labor market and strong economic growth might seem incongruous, but Yandle pointed to third-quarter productivity gains of 4.9% as an explanation. 

“We've had zero growth in employment for a year, and we’ve had 4.9% growth in productivity. Zero plus 4.9 is 4.9,” Yandle said.

Yandle and others, including Stanford University economics professor Nicholas Bloom, have said the productivity gains without corresponding labor growth can likely be attributed in part to the proliferation of artificial intelligence. Otherwise, many economists believe the economic uncertainty caused by the continually shifting tariff policy is stifling the labor market. 

Though unemployment has remained relatively low, finishing 2025 at 4.4%, job growth has remained subdued.

“We’re just not seeing that job growth that I think everyone wants,” Hebert said.