The U.S. labor market maintained strong momentum in December 2025, with nonfarm payrolls rising by 225,000, surpassing expectations. The unemployment rate held steady at 4.1%, while average hourly earnings increased by 0.4% month-over-month.
- 225,000 new nonfarm jobs added in December 2025
- Unemployment rate held at 4.1%
- Average hourly earnings up 0.4% month-over-month
- Year-over-year wage growth at 3.8%
- S&P 500 rose 0.8%, Nasdaq Composite up 1.2%
- 10-year Treasury yield reached 4.32%
Stock markets opened higher following the release of the December 2025 U.S. employment report, which revealed a robust addition of 225,000 new jobs. The figure exceeded the consensus forecast of 180,000, signaling continued resilience in the labor market despite elevated interest rates. The unemployment rate remained unchanged at 4.1%, indicating a balanced job creation and labor force participation dynamic. The data reinforced expectations that the Federal Reserve would maintain its current policy stance through at least the first half of 2026. Average hourly earnings rose 0.4% in December, matching the prior month’s increase and bringing the year-over-year growth to 3.8%, slightly above the 3.6% pace seen in November. This sustained wage growth raises concerns about persistent inflationary pressures, though core PCE inflation cooled to 2.9% in the fourth quarter. Equities responded positively, with the S&P 500 gaining 0.8% and the Nasdaq Composite rising 1.2% by midday. Financials led the rally, as the yield on the 10-year Treasury climbed to 4.32%, reflecting recalibrated expectations for rate cuts. The dollar index advanced 0.6%, while crude oil prices dipped 0.7% amid softening global demand signals. Key beneficiaries of the data included sectors sensitive to labor conditions—construction, healthcare, and professional services—while tech and consumer discretionary stocks saw modest gains. Investors are now focused on the upcoming January 2026 FOMC meeting for further guidance on monetary policy timing, with futures pricing in a 60% chance of a rate cut in June.