Mixed Jobs Report Signals Steady Interest Rates

The U.S. labor market ended the year with an unemployment rate of 4.4%, reinforcing expectations that the Fed will keep interest rates steady at its meeting later this month.

While the jobless rate was low, it was a lackluster year of job gains, which is a trend that could persist in 2026.

Employment increaed by 50,000 jobs from the prior month in December on a seasonally adjusted basis. Of the 525,000 jobs gained for the full year, it was very front loaded as approximately 84% of the jobs were added during the first four months of the year.

If you are in search of optimism after that report, some economists point towards a couple of factors that could benefit the economic outlook for 2026.

The economy is expected to gain momentum due to the delayed effects of late-2025 rate cuts and the tax incentives of the One Big Beautiful Bill Act. While these tax cuts are expected to outweigh the cost of recent tariffs, the bill’s reduction in certain social programs remains a point of concern for low-income demographics.

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