The final jobs report for 2025 put the kibosh on a Federal Reserve rate cut coming later this month. The Bureau of Labor Statistics said Friday the U.S. economy added 50,000 jobs in December, well below the Dow Jones forecast of 73,000. But the unemployment rate fell to 4.4% from 4.6% — signaling the labor market is steady despite the lackluster job growth last month. The report sent Fed rate cut expectations for January down to 2.8% from 11.1% on Thursday, according to interest rates futures trading measured on the CME Group’s FedWatch tool . “Goodbye, January. The Fed will likely hold course for now with the labor market showing tentative signs of stabilizing,” said Lindsay Rosner, head of multi-sector fixed income investing at Goldman Sachs Asset Management. “The unemployment rate improved, suggesting November’s jump was down to one-off DOGE-deferred resignations and data distortions rather than a sign of systemic weakness. We expect the Fed to remain on hold for now.” Ian Lyngen, head of U.S. rate strategy at BMO Capital Markets, echoed Rosner’s comments: “Our takeaway is that there is nothing in today’s employment figures that will prevent the FOMC from pausing on January 28.” Rate cuts later this year are still in play, however. Traders are pricing in a more than 52% chance of at least a quarter percentage-point rate reduction in April, with another reduction expected by September, the FedWatch tool shows. Other recent U.S. data points to a stronger economy, which may further dissuade the Fed from lowering its overnight rate, currently set at 3.50% to 3.75%. Third-quarter GDP surged 4.3% , while the U.S. service sector grew at a faster-than-expected pace in December, the Institute for Supply Management said Wednesday. Check out what other Wall Street economists and investors had to say about the latest jobs report: Lara Castleton, U.S. head of portfolio construction and strategy at Janus Henderson Investors: “The standout surprise was the unemployment rate, which fell to 4.4% from 4.6%. On the surface, this paints a picture of continued labor market resilience, with wages keeping pace with inflation, something market bulls will welcome. Underlying sector dynamics will be important to consider going forward.” Jeff Schulze, head of economic and market strategy at ClearBridge Investments: “The December jobs release provided the first clean read on the labor market since the government shutdown ended but did little to provide clarity about the state of the labor market given its mixed reading. On the positive side, the unemployment rate dropped to 4.4%, a positive given its rise had been a key concern and marker of labor weakness over the past year. On the negative side, revisions revealed fewer jobs created than previously believed with private payrolls bearing the brunt of the downgrade.” Roger Ferguson, former Fed vice chairman, on ” Squawk Box “: “Unfortunately, this sort of continues the trend of data on both sides giving everyone a chance to argue. My personal view is, against this kind of mixed report, if I were sitting at that table in January I’d take a pause and wait and see and try to get a little bit more clarity.” Art Hogan, chief market strategist at B. Riley Wealth: “We continue to see an environment where companies are slow to hire and slow to fire. The overarching takeaway in today’s report is that there is more good news than bad in the first on time jobs report in three months.” Jerry Tempelman, VP of fixed income research at Mutual of America Capital Management: “Today’s jobs report provides one of the most insightful looks at the labor market economists have had in three months due to data disruptions stemming from the prolonged government shutdown. We’re keeping an eye on elevated unemployment – which hit a four-year high in November’s jobs report – and how it might affect the Federal Reserve’s meeting at the end of the month. A soft labor market backdrop validated interest rate reductions in late 2025, but is not causing concerns that would substantiate further cuts this month.” Dennis Follmer, chief investment officer, Montis Financial: “We believe the market is too optimistic about the Federal Reserve’s ability to cut rates this year, and we expect only one rate cut in 2026. Higher for longer on interest rates has been the name of the game for an economy continuing to surprise to the upside. As long as that economic strength continues, the market’s expectations for rate cuts are likely to prove overly optimistic.” Bret Kenwell, U.S. investment analyst at eToro: ” While economists dissect the report, investors might look at the jobs data a bit more optimistically. A collapsing labor market is bad news, as it would point to an eventual deterioration in an economy that’s mainly driven by consumer spending. However, a gradual cooling in the labor market — like we have now — could eventually push the Fed to take action sooner rather than later, particularly with a new Fed chair in place later this year.” — CNBC’s Alex Harring, Yun Li, Sarah Min and Michelle Fox contributed reporting.
