Job hugging is the new job hopping
Job-hugging is a new form of job-hopping due to the slowdown in the labor market.
U.S. employers added 50,000 jobs in December, roughly in line with some analysts’ expectations and capping a mixed year for the U.S. job market.
Last year saw relatively strong and stable employment growth in the first few months of 2025, followed by a noticeable cooling from May, with multiple months of net employment declines after the revision.
The unemployment rate in December was 4.4%, down from 4.6% in November. Interest rates in November were the highest since September 2021.
The salary increase for October was revised downward by 68,000 jobs, from -105,000 to -173,000. Salary increases for November were also revised downward by 8,000 jobs, indicating that the labor market at the end of 2025 will be weaker than originally expected.
Most consumers aren’t confident they can find a job
Americans are less optimistic about their ability to get a job heading into 2026, according to the New York Fed’s December 2025 Consumer Expectations Survey.
The probability that respondents believed they would find work if they lost their job fell to 43.1% in December, the lowest level since the survey began in 2013. This was the second lowest recorded in the past six months. In the August survey, respondents had a 44.9% chance of finding work if they lost their current job.
What about the overall job market?
Nongovernmental reports tell a slightly more optimistic story. Private sector employers added 41,000 jobs in December, according to the ADP National Employment Report.
“While we believe the labor market remains in low-employment, low-layoff mode, our data suggests the worst of the economic slowdown may be behind us,” David Michael Tinsley, senior economist at Bank of America Research Institute, told reporters on a conference call on January 7.
According to a Challenger, Gray & Christmas report that month, U.S.-based employers announced 35,553 layoffs, the lowest in 17 months and down 50% from the 71,321 announced in November. In total, employers announced about 1.2 million job cuts in 2025, an increase of 58% from 2024 and the highest annual total since 2020.
“This year ended with the fewest announced layoff plans of any year,” said Andy Challenger, workplace expert and chief revenue officer at Challenger, Gray & Christmas, in a statement. “December has typically been a slow month, but combined with the increase in hiring plans, this is a positive sign after a year of significant layoff plans.”
A new way to track the labor market
The day before the BLS released its December jobs report, the New York Fed released new quarterly and monthly indexes that are supposed to guide monetary policy.
The Heise-Pierce-Weber (HPW) Labor Market Tightness Index summarizes current wage pressures and predicts short-term wage inflation based on turnover and number of job openings per job applicant.
“Unlike other similar indicators, the HPW index incorporates the following behaviors: both “This is important because most new employees, both unemployed and employed, come not from unemployment but from other jobs,” the New York Fed said in a statement.
A labor market is considered “tight” when there are many jobs available but not enough workers to fill them. A market is considered “loose” when jobs are harder to find and workers are easier to find.
In a tight labor market, where wages are rising and consumer spending tends to follow suit, workers have more power. At the same time, businesses are facing rising labor costs, and passing those costs on to consumers can lead to inflation.
As of Jan. 8, the latest index reading for November 2025 shows that U.S. wage growth has improved recently, but growth and turnover remain slightly below long-term averages, said Mike Scordeles, head of U.S. economics at Trust. He added that re-entering the workforce may be hiding workers who lost their work permits due to immigration status changes in early 2025, meaning he expects the index to decline.
Will the Fed cut rates in January?
The Fed’s benchmark interest rate has been cut for the third time in a row, but most forecasters don’t expect the December jobs report to prompt another rate cut at the Federal Open Market Committee meeting in late January.
Analysts largely expect the commission to postpone further cuts to give the economy time to reflect the effects of previous cuts.
On the morning of January 9, the CME Fed Watch tool, which tracks the likelihood of interest rate changes at each Fed meeting, showed an 88.4% chance that the Fed would keep interest rates unchanged between 3.5% and 3.75%.
This story is developing and will be updated to add new information.
Contact Rachel Barber at rbarber@usatoday.com and follow her at X @rachelbarber_
