December Nonfarm Payrolls Miss Estimates; Unemployment Rate Declines

10:34 AM EST, 01/09/2026 (MT Newswires) -- The US economy added fewer jobs than projected in December, while the unemployment rate moved down, likely supporting the case for a pause on interest rate cuts.

Total nonfarm payrolls rose by 50,000 last month, the Bureau of Labor Statistics said Friday. The consensus was for a 70,000 increase, according to a survey compiled by Bloomberg.

Gains for November were revised down by 8,000 to 56,000, while October payrolls were adjusted downward by 68,000 to show a 173,000 drop, according to the BLS.

"The labor market appears to have stabilized at the end of last year," TD Economics Senior Economist Thomas Feltmate said in a note. "Smoothing through volatility, private payrolls have largely steadied in recent months while the unemployment rate ticked down from its cycle high reached in November."

The unemployment rate decreased to 4.4% in December from a downwardly revised 4.5% the month before, which was Wall Street's view.

"The data doesn't change our view for the (Federal Reserve) to keep policy steady as Fed members wait for more data on the labor market and inflation," Oxford Economics Lead Economist Nancy Vanden Houten said in remarks emailed to MT Newswires.

The probability of the Federal Open Market Committee keeping its benchmark interest rate unchanged later this month rose to 95% from 89% on Thursday, according to the CME FedWatch tool.

Private payrolls advanced by 37,000 in December, decelerating from a 50,000 gain in November and missing the Bloomberg consensus that called for an increase of 75,000, BLS data showed. Employment growth in the service industry accelerated to 58,000 from 32,000, while the goods-producing sector lost 21,000 jobs.

Average hourly earnings grew by 0.3% sequentially, in line with the market estimate. The annual measure increased 3.8%, higher than the 3.6% rise projected by analysts.

Job cut announcements in the US fell last month to the lowest since July 2024, while the annual tally hit the highest in five years, Challenger Gray & Christmas said Thursday. Earlier in the week, ADP (ADP) reported that employment in the US private sector rose less than expected in December, while separate government data showed that job openings declined in November.

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