The U.S. Labor Department said Friday that the unemployment rate fell to 4.4% from 4.5% in November, despite companies adding 50,000 positions.

Powell led the Fed to lower its benchmark overnight interest rate by three quarters of a percentage point last year to keep the job market from softening, even though his more hawkish colleagues warned that it could slow or even threaten progress on lowering above-target inflation.

Latest employment market data may allow the central bank some leeway to leave short-term borrowing costs where they are to keep inflation pressure on, as Powell said last month.

December’s modest job growth is “very much in line with the businesses I am talking to, which is that the low-hire environment continues,” Richmond Fed President Thomas Barkin told reporters.

Post-jobs report radio interview: “Inflation is still too high,” said Atlanta Fed President Raphael Bostic, asking for a laser-like focus on that component of the Fed’s mandate.
Both Bostic and Barkin are hawkish Fed policymakers, and neither votes on monetary policy in 2026.

Powell leaves the Fed on May 15. Trump has stated he has chosen a replacement who supports more rate cuts, despite his repeated criticism of Powell for failing to deliver them. An announcement is expected this month.