According to the BLS, the latest report from the U.S. Bureau of Labor Statistics reveals that in December, total nonfarm payroll employment increased by 50,000 while the unemployment rate remained steady at 4.4 percent. Job growth was observed in food services, health care, and social assistance sectors, while retail trade experienced a decline in employment.
Here is a detailed breakdown of the jobs data:
While the unemployment rate decreased in this report, the bond market did not react positively due to the missed estimates and negative revisions in the jobs report.
Residential construction jobs: Big negative revisions
The latest jobs report indicates significant negative revisions in residential construction jobs, which had previously reached new highs but are now showing a downward trend. This trend could signal a potential economic downturn, although lower mortgage rates and improved builder confidence may impact the situation.
Recent data on homebuilder confidence shows a slight increase before the decline in rates. The upcoming months will reveal the effects of lower rates on the market demand and builder activity.
Additionally, recent housing starts data has shown an uptick in housing permits, attributed to lower mortgage rates observed in the latter part of 2025.
Jobless claims data still low
Despite various economic indicators, jobless claims data remains low, indicating stability in the job market. Until the four-week moving average of jobless claims reaches a certain threshold, discussions of a recession should be approached with caution.
Conclusion
The latest jobs report did not have a significant impact on the bond market, and as we move closer to the end of Jerome Powell’s tenure as Fed Chairman, upcoming news on Fed policies may influence market dynamics. Monitoring labor data, jobless claims, and the unemployment rate will be crucial in 2026, especially with the recent rate cuts and the housing market forecast. Mortgage rates are currently at 6.06% but are expected to fluctuate based on economic conditions.