Tariffs loom over US economy’s disappointing job gains for December 2025

The US economy added a disappointing 50,000 jobs in December 2025, according to government data. CEI experts point to tariffs and economic uncertainty as a drag on job creation.

Sean Higgins, CEI research fellow:
“The Labor Department’s report Friday that employment rose by just 50,000 jobs in December – below already modest expectations and with October and November gains revised downward by a combined 76,000 jobs – shows continued drag created by the current administration’s volatile tariff policies. Employers are reluctant to hire when they don’t know what prices are going to be six months to twelve months from now.

“Tellingly, the number of people employed part-time for economic reasons, currently 5.3 million, is up by 980,000 over the past year; and the average hours worked ticked down marginally in December. One likely explanation is that more people are using ‘gig economy’ jobs to make ends meet.
“Ironically, the employment numbers likely would have been worse but for a quirk in how the department counts federal jobs. Government employment rose by 2,000 in December but is down 277,000 total from when President Trump took office and began his effort to shrink the federal workforce. The Labor Department doesn’t count as unemployed those federal workers who have been let go but are still receiving severance pay, and it is unclear how many workers fall into that category. Last year’s 43-day government shutdown halted those payments, delaying that shift for two additional months.”

Ryan Young, CEI senior economist:
“What we’re seeing is an economy hunkering down in the face of uncertainty. Hirings are down, and so are firings. It’s safer to stay in place or to get a job in a safe-haven sector like health care.
“While health care employment is booming, most of the rest of the economy is flat. Manufacturing has contracted for nine months in a row and lost roughly 60,000 jobs in 2025 in the face of tariffs and whiplash-inducing policy changes.

“That uncertainty is why investment fell 0.1 percent even as GDP grew 4.3 percent last quarter. This bodes poorly for job creation in 2026. People are less willing to take chances or explore new opportunities. No wonder job creation is the lowest it’s been since the pandemic.”