United States employers added just 50,000 jobs in December, creating mounting pressure on the Federal Reserve (Fed) to accelerate interest rate cuts rather than continue cautious easing, according to a financial advisory firm executive.
Nigel Green, chief executive officer (CEO) of deVere Group, said on January 9 that December employment data should change the nature of Federal Reserve policy adjustments. The firm manages approximately $14 billion in assets globally.
The US Bureau of Labor Statistics reported December payroll employment rose 50,000 while the unemployment rate fell to 4.4 percent. The 2025 annual payrolls gain of 584,000 represents the worst year outside a recession since 2003.
Hiring slowed sharply through the final quarter of 2025, leaving last year among the weakest periods for employment expansion outside downturn conditions. Employers across multiple sectors are delaying recruitment plans, citing cost pressures, policy uncertainty and tighter financial conditions.
Green argues the unemployment figure masks the true state of labor demand. Companies are not conducting mass layoffs but are refusing to add new workers, which he describes as how economic slowdowns deepen before damage becomes visible.
Average hourly earnings rose 0.3 percent in December, with the annual increase reaching 3.8 percent. Inflation has eased significantly from peak levels, with goods inflation cooling and services inflation showing consistent moderation.
Food services and drinking places added 27,000 jobs, health care added 21,000, and social assistance increased by 17,000. Retail trade lost 25,000 jobs.
Green said financial conditions remain restrictive for households and firms, particularly outside large corporations. Credit costs stay elevated, which he claims hits small and midsized businesses first. When borrowing costs remain high, investment slows and hiring freezes follow.
Structural changes are reshaping labor demand. Automation and artificial intelligence (AI) improve productivity yet suppress near term job creation, requiring economic policy to reflect that shift.
The October payroll report was revised down by 68,000 from a loss of 105,000 to a loss of 173,000 jobs, while November was revised down by 8,000 from a gain of 64,000 to 56,000.
The Federal Reserve cut rates three times in 2025, bringing the benchmark federal funds rate to a range of 3.50 percent to 3.75 percent. The Fed’s December projections suggested only one additional quarter point cut in 2026. However, market expectations and some economists differ from this outlook.
Mark Zandi, chief economist at Moody’s Analytics, expects three cuts of a quarter percentage point each before midyear 2026. The CME Group’s FedWatch tool points to two cuts in 2026, one in April and one in September.
Green believes three reductions before the end of 2026 stands as the base case. Employment weakness, cooling inflation and restrictive financial conditions create a powerful case for faster adjustment, according to his analysis.
The Federal Reserve’s next meeting is scheduled for January 27 and 28, 2026. Market pricing shows just 13.8 percent probability of a cut at that meeting.
