The household survey will again be the focus of attention in the December jobs report, as the sharp drop — or even reversal — in immigration flows makes it difficult to assess the underlying rate of growth in the potential labor force. Also, the data from the Quarterly Census on Employment and Wages indicate that the establishment survey has been substantially overstating job growth at least through the first half of 2025.

For these reasons it is difficult to know what sort of numbers we should expect for job growth. And since the numbers will likely be revised down in next year’s benchmark revisions, it is not even clear what they mean. Fed Chair Jerome Powell speculated that the establishment survey is overstating job growth by 60,000 a month. This is clearly just an educated guess, but in a context where the establishment has shown job creation of just over 50,000 a month in 2024, the overstatement is potentially quite large.

Given the issues with the establishment survey, the focus will be on specific sectors such as health care — which has accounted for the vast majority of job creation in recent months — as well as the manufacturing sector, which has been losing jobs. The wage data will also provide important insight into the state of the labor market.

The employment and unemployment data in the household survey will provide us with more insight, since these are ratios. They should be the main focus of attention with the December report.

Unemployment Rate Likely to Hold Steady

There has been a substantial increase in the unemployment rate over 2025, from 4.0 percent in January to 4.6 percent in November.  While a number of labor market indicators had been pointing to a weakening of the labor market through the summer and fall, the most recent data— in the form of falling unemployment insurance claims and a modest improvement in the Indeed Job posting index — suggest the labor market might have stabilized or even improved slightly.

This should mean little change in the unemployment rate, except perhaps due to rounding. Carried to the next decimal, the rate was 4.56 percent in November, so a drop to 4.5 percent is certainly possible.

Unemployment for Black Workers May Edge Down

One of the most striking developments in the labor market in 2025 has been the sharp deterioration in labor market prospects for Black workers. The unemployment rate for Black workers edged up in 2023 and 2024 after hitting an all-time low of 4.8 percent in April of 2023. But it has risen by more than two full percentage points in 2025, from 6.1 percent last December to 8.3 percent in November. The unemployment rate for whites has risen just 0.3 percentage points over this period.

There is considerable error in the monthly data, so it’s possible the November figure overstates the true unemployment rate. But if the December rate is comparable, it will mean that we have seen an extraordinarily sharp deterioration in the labor market for Black workers.

Unemployment of Native-Born Workers Likely to Be 0.4 Percentage Points Above Year-Ago Level

The unemployment data for native-born workers are not seasonally adjusted, so the month-to-month changes have limited meaning. But the year-over-year rate was 0.4 percentage points (p.p.) higher in November. It is likely to again be roughly 0.4 p.p. above its year-ago level for December.

There has been some confusion about a boom in employment for native-born workers, as people have misunderstood how the data are constructed. The ratios for unemployment and employment rates for native-born workers are meaningful. The levels are not.

Share of Multiple Job-Holders to Remain Near Century High

The share of workers with multiple jobs rose to 5.8 percent in November, the highest level since December of 1999. This likely reflects people taking a second job because they don’t feel they can make ends meet on their normal paycheck. These data are not seasonally adjusted, but the November figure was 0.4 p.p. above the year-ago share. The year-over-year rise is likely to be comparable for December.

November Rise in Involuntary Part-Time Likely to Be Partially Reversed

There was an extraordinarily large rise of more than 900,000 in the number of people who reported that they were involuntarily working part-time in November. These data are erratic. While it is likely that a jump this large reflects something real in the economy, the true increase was probably less than indicated in the November report. This should mean at least a modest decline in December.

The Share of Unemployment Due to Quits Likely to Remain Low

The share of unemployment resulting from people voluntarily leaving their job has been unusually low all year, given the level of unemployment. This reflects pessimism about labor market prospects. It fell to 11.0 percent in November from 11.4 percent in September. It is likely to remain low in December.

Wage Growth Remains Slow

The rate of year-over-year wage growth slowed to 3.5 percent in November. That’s down from 4.0 percent through most of 2023 and 2024. With inflation hovering near 3.0 percent, this means real wage growth has slowed to a crawl. The changes in this measure are somewhat erratic, but it seems clear it has slowed from its pace of the prior two years.

Health Care Will Dominate Job Growth

The health care sector has accounted for the overwhelming majority of job growth since April. This will likely again be the case in December. State and local governments have added a bit more than 15,000 jobs a month since April. There is likely to be modest job growth in this sector in December. Federal employment will likely be stagnant in December, following sharp declines in the prior three months, as the DOGE cuts have all taken effect already. The restaurant sector is also likely to show modest gains. It has added a bit less than 20,000 a month since April.

Manufacturing and Mining to Shed Jobs

The manufacturing sector has been shedding jobs for two years at the rate of roughly 10,000 a month. The actual rate of job loss may be somewhat more rapid than indicated in the establishment survey. Preliminary data from the Quarterly Census of Wages and Employment showed the economy lost 205,000 manufacturing jobs from the second quarter of 2024 through the second quarter of 2025.

The mining sector lost 17,000 jobs over the last year, largely due to reduced drilling in the oil industry. At current prices, oil drilling is not profitable in many areas.

Gradually Weakening Labor Market

The story in December is likely to be a continuation of the pattern we have been seeing of a gradually weakening labor market. The unemployment rate is still low by historical levels, but workers in disadvantaged groups, like young people and Black workers, are hard-hit. The weak labor market also lowers wage growth and reduces job market prospects more broadly.