December Jobs Report Sends Mixed Signals
The U.S. labor market ended 2025 with weaker-than-expected job growth, as December payrolls rose just 50,000 while prior months were revised lower. Despite soft hiring, the unemployment rate dipped to 4.4% and broader underemployment measures improved, creating a mixed picture of labor conditions. For 2025 overall, average monthly job gains slowed sharply to 49,000, marking the weakest non-recession year since 2003 and prompting some economists to label it a “hiring recession.” Solid wage growth, strong consumer spending, and GDP growth estimates suggest the broader economy remains resilient even as the Fed weighs its next move.
Trade Deficit Shrinks Under Tariffs
The U.S. trade deficit fell to $29.4 billion in October, its lowest level since mid-2009, as exports rose and imports declined following Trump’s tariffs. While the year-to-date deficit remains higher than in 2024, economists say the narrowing gap should boost fourth-quarter growth amid disruptions from the federal shutdown. Strong productivity growth was up 4.9% in the third quarter, helped push unit labor costs sharply lower, which eased inflation concerns despite weak hiring. At the same time, layoffs remain low, reinforcing the view of a “jobless expansion” supported by efficiency gains rather than workforce growth.
Bank Stocks Slide on Credit Card Cap Talk
Bank and financial services stocks fell sharply after Trump called for a one-year cap on credit card interest rates at 10%, rattling investors. Major lenders and payment networks declined on concerns the proposal would hurt profitability and restrict lending, though the plan would require congressional approval to take effect. Critics warned the cap could lead banks to pull back credit access, potentially squeezing consumers. Meanwhile, buy-now-pay-later stocks rose on expectations that borrowers may shift toward alternative financing options.
As always, Base Wealth Management remains focused on aligning investment strategies with your long-term goals amid evolving market conditions.
