In 2025, U.S. employers added 181,000 jobs, the lowest single-year non-recession gain since 2003, the Bureau of Labor Statistics reported Wednesday after benchmark revisions cut prior counts. That total averaged about 15,000 jobs per month, down from an initially reported 49,000 pace.
Final benchmark revisions for the year before March 2025 reduced initial counts by a combined 898,000. The unemployment rate edged down to 4.3%, below forecasts of 4.4% (Ed. note: This is the weakest non-recession annual job growth since 2003.)
Markets reacted, with stock futures moving higher. The S&P 500 rose about 15 points while the Dow and Nasdaq dipped slightly, and Treasury yields gained.
Economists noted job gains were narrowly concentrated in construction and health care. Nancy Vanden Houten of Oxford Economics said, “overstates any emerging strength in the labor market. Growth in nonfarm payrolls blew past expectations, but job gains were narrowly based and concentrated in construction and health care. Most other sectors posted meager job gains or job losses. The federal government continued to shed jobs as did state and local governments.”
Analysts said the stronger-than-expected January reading likely reduces near-term odds of rate cuts by the Federal Reserve. Krishna Guha, head of economics and central banking at Evercore ISI, said, “[The jobs report] pours cold water on the idea the Fed could cut rates again before mid-year and will fuel internal debate as to how restrictive policy is and how much slack there is in the labor market.”
