The US Labor Market Has Weakened. What Will Friday's Jobs Report Reveal?

Core Insights - The U.S. job market is expected to show slow expansion in December, with an addition of 73,000 jobs and a decrease in the unemployment rate to 4.5% from 4.6% in November [2][3][11] Job Growth and Unemployment - The anticipated job growth in December is slightly higher than the 64,000 jobs added in November, which marked the highest unemployment rate since 2021 [3][11] - The average job addition from May to November was only 17,000 per month, significantly lower than the 147,000 per month in the year leading up to April 2025 [4] Economic Factors Influencing Job Market - Tariffs, reduced immigration, and the adoption of artificial intelligence have negatively impacted job growth since mid-2022 [11] - Employers have been hesitant to hire due to uncertainties surrounding trade policies and the effects of tariffs on consumer behavior [8] Federal Reserve Response - Labor market concerns have led the Federal Reserve to cut interest rates multiple times to stimulate hiring and reduce unemployment [6][7] - The upcoming report is crucial for the Fed as it considers further rate cuts, especially after recent sluggish hiring trends [7] Data Sources and Predictions - The December job data is expected to be less distorted by previous government shutdowns, providing a clearer picture of the job market [9][11] - Private-sector data indicated that 41,000 jobs were added in December, which was below expectations but an improvement from November's decline of 29,000 jobs [12]