Good morning. The U.S. economy closed out 2025 with a puzzling mix: sluggish job growth alongside accelerating productivity.
The U.S. Bureau of Labor Statistics (BLS) reported on Friday that nonfarm payrolls rose by a seasonally adjusted 50,000 in December 2025, missing the 73,000 Dow Jones estimate and slowing from November’s revised gain of 56,000. November payrolls were revised down by 8,000 jobs, while October’s loss deepened to 173,000 from 105,000. For 2025 as a whole, payrolls grew by an average of 49,000 jobs per month, down sharply from 168,000 in 2024.
Bank of America Global Research analysts wrote in a report on Friday that although payroll growth has slowed since June, the unemployment rate has risen by only about 11 basis points. The report noted, “We have been highlighting that tighter immigration restrictions are likely to play a bigger role in the slowdown in job growth this year.”
The unemployment rate is a key statistic for the Federal Reserve, and markets responded to Friday’s miss by pricing out a January rate cut, according to the analysts. Futures now imply less than half a cut priced in through April.
The productivity factor
