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US Jobs Slowdown: Tariffs, AI Dampen Hiring Pace
9 Jan
Summary
- December job growth missed expectations, adding only 50,000 positions.
- The unemployment rate unexpectedly fell to 4.4% in December.
- Tariffs and AI investment contribute to businesses' hiring caution.
U.S. job growth experienced a significant slowdown in December, adding just 50,000 positions, falling short of economists' expectations. This moderation in hiring is attributed to businesses adopting a cautious approach, influenced by ongoing import tariffs and increased investments in artificial intelligence. The labor market has entered a phase characterized by minimal hiring and firing.
The unemployment rate, however, showed a contrasting trend, dipping to 4.4% in December. This unexpected decrease, along with revised November figures, suggests underlying resilience in the labor market despite slower job creation. Economists note that job growth has moderated throughout 2025, with the Bureau of Labor Statistics set to release benchmark revisions next month.
These labor market dynamics, particularly the structural challenges posed by tariffs and AI, are leading experts to believe that further interest rate cuts by the Federal Reserve may have limited impact on stimulating job growth. The central bank is expected to maintain its current interest rate policy to assess the economy's direction.
