The U.S. labor market concluded 2025 with what appears to be modest job growth. And yet the jobs report released Friday does little to quiet growing questions about whether the economy is stabilizing, stuck in a prolonged “no-hire, no-fire” limbo — or outright weakening.

According to the Bureau of Labor Statistics, employers added 50,000 jobs in December, below economists’ expectations. The unemployment rate edged down even as broader measures of labor slack continued to worsen compared to 2024. And November’s jobs numbers were revised down to show weaker job growth than expected.

President Donald Trump was eager to tout the data ahead of its scheduled release. On Thursday night, he posted jobs figures on social media that showed growth in the private sector that incorporates unreleased data from December. The president is usually briefed on the latest employment data a day before BLS releases it.

On the surface, the headline numbers suggest an economy still adding jobs, albeit at a sluggish pace. But dig deeper, and the worrying signs begin to pile up.

Retail job losses raise red flags

One of the most striking developments in the report was a sharp 25,000 decline in retail employment, an unusual contraction even accounting for the way the BLS numbers smooth out seasonal effects. Losing retail jobs suggests a quiet but deeper pullback — either because planned hiring never fully materialized, or because companies are actively cutting costs regardless of consumer spending.

The weakness in retail adds to evidence that companies may be acting cautiously and defensively, prioritizing margin protection and operational efficiency over growth. It also raises concerns about demand expectations heading into 2026, especially as households continue to feel the strain of high prices and elevated borrowing costs.

“Employment declined in warehouse clubs, supercenters, and other general merchandise retailers (-19,000) and in food and beverage retailers (-9,000),” the report detailed.

Underemployment and long-term joblessness are getting worse

Beyond payroll counts, other measures of labor market health continued to erode. The number of workers employed part-time for economic reasons rose again in December, pushing underemployment higher. At the same time, the ranks of the long-term unemployed — those out of work for 27 weeks or more — continued to grow, now accounting for a larger share of the unemployed population.

This combination can be read as a warning sign all on its own. It suggests that while companies may not be announcing aggressive layoffs in line with the most telling recessionary behavior of recent decades, they’re not expanding headcount either, or offering full-time roles. Millions want to find jobs, yet find it increasingly difficult to secure stable, well-paid positions.

The same telling sector story persists

Another concerning sign is how hiring remains uneven across industries. Like recent private data releases, the BLS report shows gains concentrated in healthcare and "social assistance" — sectors driven by inelastic demand and a large aging population. Meanwhile, employment in professional and business services remained weak, also mirroring private data that shows continued retrenchment in white-collar and capital-intensive fields.

Wage growth was modest, suggesting weaker bargaining power for workers, while the length of workweeks fell slightly.

A labor market searching for a floor

Friday’s report lands after months of noisy, distorted labor data, following last fall’s government shutdown and repeated warnings from Federal Reserve Chair Jerome Powell that official payroll figures may be overstating job creation. In response, investors and policymakers have necessarily looked to private indicators — most of which point to slowing hiring beneath calm headlines.

As things stand, it seems 2026 may be the year the U.S. labor market spends searching for a higher floor.

— Joseph Zeballos-Roig contributed to this report.

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