The U.S. economy added a below-forecast 50,000 jobs in December, the unemployment rate dropped to 4.4%, and an important measure of consumer confidence climbed slightly in early January but remained far below its level a year ago at this time.
“December’s jobs report reinforces a pattern we have been watching for most of the last year. Services hiring held up as expected, but the goods-producing side of the economy continues to drag on overall momentum,” Shawn DuBravac, chief economist at the National Marine Manufacturers Association, told Trade Only Today this morning.
“Manufacturing has now shed jobs for eight consecutive months, and construction remains uneven as higher rates and a weak housing market constrain activity,” DuBravac added. “We remain in a low-hire, low-fire equilibrium. Employers are hesitant to add workers, but they are also reluctant to cut aggressively. That dynamic is keeping unemployment relatively stable even as payroll growth cools.
“October and November job gains were revised down by a combined 76,000. Average job growth over the past six months has fallen to a very weak pace, and 2025 now stands as the slowest year for job creation since 2020,” he said.
“Looking ahead, the upcoming benchmark revisions loom large. If job gains are revised materially lower, that will weigh heavily on how the Federal Reserve evaluates the path for rate cuts,” he added. “For now, a pause [at the January meeting] still looks like the most likely outcome, but inflation data and revisions will ultimately decide the timeline. We will receive our next look at inflation data on Tuesday,” when the government releases the Consumer Price Index for December.
DuBravac said the report suggests the industry will continue to face headwinds, and that with job growth soft, consumers are likely to remain cautious. “While sentiment inched higher this month, it remains well below year-ago readings.”
The industry has 13 boat shows in January, including five this weekend: Boston; Atlanta; Tulsa, Okla.; and Daytona Beach and Charlotte County, Fla.
The University of Michigan said this morning that its preliminary Consumer Sentiment Index for January climbed slightly, to 54, from a final December reading of 52.9.
“Consumer sentiment inched up for the second straight month and reached its highest reading since September 2025,” Joanne Hsu, director of the university’s Surveys of Consumers, said in a statement that accompanied the index.
“Improvements in January were seen among lower-income consumers, while sentiment fell for those with higher incomes,” Hsu added. “All told, while consumers perceived some modest improvement in the economy over the past two months, their sentiment remains nearly 25% below last January’s reading.
“They continue to be focused primarily on kitchen-table issues, like high prices and softening labor markets. Although consumers’ worries about tariffs appear to be gradually receding, they remain guarded about the overall strength of business conditions and labor markets. Note that more than 90% of interviews for this release were collected prior to the capture of [President Nicolas] Maduro in Venezuela.”
Chad Lyon, managing director, global inventory finance, at Wells Fargo, told Trade Only Today that “consumer sentiment remains below prepandemic highs, influenced by perceptions of inflation and interest rates. However, steady employment and a generally healthy economy provide a strong foundation. If today’s reading aligns with recent trends, it suggests that while some consumers may approach big-ticket purchases cautiously, the stability in jobs and economic growth could offer reassurance to others — creating opportunities for engagement at winter and spring boat shows.”
Of the jobs report, Lyon said the “reported 50,000 jobs fell short of expectations, signaling a cooling labor market that remains resilient. The unemployment rate improved slightly, even as October and November figures were revised lower. Wage growth continues to trend positively, supporting consumer spending and benefiting sectors like recreational boating.
“However, higher long-term interest rates remain a headwind, which could make boat loans more costly,” he said. “For the Federal Reserve, these numbers potentially add uncertainty to the interest-rate outlook, reflecting a gradual slowdown in the labor market without a sharp downturn. Upcoming inflation data will be critical in shaping the path forward.”
One bright spot in the jobs report was that hourly earnings for private-sector workers rose 12 cents, or 0.3%, to $37.02 in December. During the past 12 months, workers’ earnings have risen 3.8%, above the current rate of inflation.
The labor force participation rate — the percentage of the population that is in the workforce — fell slightly to 62.4%.
“The labor market is kind of stuck, with limited job growth, but also the average worker is still getting decent raises,” said Ian Wyatt, chief economist at recreational marine lender Huntington National Bank. “Job growth is weak. Once we include revisions, the economy has only added under 75,000 jobs since May — within the survey margin of error, so real job growth could be flat since May. However, that period includes the large federal job cuts.
“The private sector is performing better, with job growth of 208,000 over the same period,” he added. “Almost all job growth is in healthcare, and leisure and hospitality. On the other hand, workers are getting decent raises above the rate of inflation. Average hourly earnings rose 0.3% month-over-month and 3.8% year-over-year. Working Americans getting raises, combined with the 75 million Americans receiving Social Security benefits getting a cost-of-living bump of 2.8% this month, should help boost consumer spending in the first quarter.”
The Labor Department revised October’s job losses even lower — by 68,000 — deepening the decline from 105,000 to a final figure of 173,000. November’s gain was revised downward by 8,000, from 64,000 to 56,000.
Because there were no big surprises in the jobs report, Wyatt, like DuBravac, expects that the Federal Reserve will pause its rate-cutting efforts at the Jan. 27-28 meeting of its policymaking committee and keep the benchmark federal funds rate at the current range of 3.5% to 3.75%.
“Our expectation is unchanged for the fed funds rate; we expect two to three cuts this year, with the first cut before May, and by the end of the year the rate will be around 3%. While cuts to the fed funds rate will lower floorplan financing costs for boat dealers and other floating-rate debt, the impact on buyers looking for long-term, fixed-rate boat loans is less certain,” Wyatt said. “The 10-year Treasury [note] has not fallen despite cuts to the overnight fed funds rate — in most cutting cycles, the yield on the 10-year has fallen much more than during this cutting cycle. Until we see some movement in those long-term rates, the cost of financing a boat will remain a challenge.
“The president’s comments yesterday on having the government buy mortgage bonds were interesting,” Wyatt added. “If the effect is to lower the spread between Treasuries and mortgage bonds, there could be spillover into the boat-loan market, and spreads above Treasuries could come down and lower financing costs for boat buyers. Wealthier buyers, whose balance sheets are benefiting from the S&P 500 hitting all-time highs and higher rates boosting their income from fixed-income investments, should be flush with cash.”
The Labor Department said restaurants and bars, as a category, led the way in job creation in December with 27,000 new positions. The healthcare sector, long the top leader for job growth, added 21,000 jobs. Social assistance employment was up 17,000.
The government said employment showed little or no change in December in other major industries. The Trump administration’s heavy federal job-cutting campaign has ended, and that sector added 2,000 jobs in December.
The government said the economy lost 25,000 jobs in the retail sector in December, usually a prime month for hiring during the holiday season.
Outplacement firm Challenger, Gray & Christmas said Thursday that U.S. companies announced 35,553 job cuts in December — the fewest for any month in a year-and-a-half — and laid out plans to add nearly 10,500 jobs in 2026, a development that the firm called a positive sign for the economy.
“Some of the uncertainty from earlier in the year is fading, and we expect a more stable start to the year for employment,” Wyatt said.
Lyon said the labor market presents an interesting paradox.
“While companies are slowing their pace of hiring, as reflected in today’s job numbers, they are not actively reducing their workforce,” he said. “For the boating industry, this stability helps sustain consumer confidence. However, broader-based hiring would serve as a key catalyst for boosting discretionary spending, which could further drive demand in recreational boating.”
