The following is MBA SVP and Chief Economist Mike Fratantoni’s reaction to this morning’s U.S. Bureau of Labor Statistics report on employment conditions in December.

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“The pace of employment growth slowed in December to 50,000, in line with the average pace of 49,000 for all of 2025. Employment growth was much slower than the roughly 168,000 pace in 2024. Employment numbers for October and November were revised downwards by 76,000, considerably weaker than initially reported. The economy is growing, but unevenly, and employers certainly appear to be cautious about adding additional workers, as evidenced by the still very slow hiring rate in the JOLTS data.

“Private sector job gains in December were concentrated in just a few sectors, including hospitality and health care. There was also an increase of 18,000 in local government jobs in December.

“The unemployment rate declined to 4.4% in December, with the November rate revised down to 4.5% due to the annual revisions to the seasonal adjustment factors. The participation rate dropped a tenth over the month as more individuals left the labor force. The share of workers who had been unemployed for more than six months increased to 26% in December, another sign that it is getting tougher for job seekers to find a new position.

“This report is fairly neutral with respect to its implications for the housing and mortgage markets. It reinforces the sense that the economy is slowly growing but does not increase the urgency for additional rate cuts. As we look ahead to the spring housing market, these trends are likely to support only modest improvement in the pace of activity.”