US hiring collapses to 181,000 in 2025, down 88% year-on-year
What's the story
The US economy saw a meager job growth in 2025, with only 181,000 jobs added during the year. The figure is a far cry from the initial estimate of 584,000 and is 88% lower than the previous year's addition of 1.46 million jobs. The health care sector was a major contributor, adding a net of 137,000 jobs. Other contributing sectors included social assistance and construction. However, federal government and financial activities saw job losses during this period.
Market trends
Unemployment rate dips to 4.3%
The unemployment rate dipped from 4.4% to 4.3% in January, indicating some positive movement in the job market. However, the Bureau of Labor Statistics' revisions also show that the labor market contracted for four months in 2025—January, June, August, and October. This is a revision from earlier data which only showed a net loss of jobs in three months during that year.
Expert opinion
Fed Chair suggests last year's hiring numbers may be inflated
Federal Reserve Chair Jerome Powell recently suggested that last year's hiring numbers may have been overstated. "We think there's an overstatement in these numbers by about 60,000, so that would be negative 20,000 per month," Powell said at a news conference. He also noted that the labor market has continued to cool gradually but perhaps at a slightly slower pace than initially anticipated.