The US job market is far weaker than previously thought, as new data shows a massive downward revision in labor gains last year.
The latest report from the Bureau of Labor Statistics shows that the US added just 181,000 jobs last year, down sharply from the initially reported 584,000.
Wellington-Altus chief market strategist James E. Thorne says the figure translates to an average of 15,000 jobs added per month.
“The US economy added just 50,000 jobs in December and a total of only 181,000 for all of 2025, the weakest annual job growth outside a recession since 2003… By any objective measure, the labor market softened considerably. The Fed’s assessment of strength in 2025 now looks badly misplaced.”
Amid the job gains revision, billionaire and LinkedIn co-founder Reid Hoffman says the popular narrative that AI is contributing to a weak US labor market is not supported by data. According to Hoffman, firms are using the narrative as an excuse for faulty labor decisions, pitting man against machine.
During the pandemic, many organizations overhired. In the years following, entire divisions were built for conditions and experiments that didn’t pan out. Now we’re seeing that unwind. When companies refactor, it shows up as layoffs — especially at entry levels.
“What most companies are really doing is playing the narrative game well. We’re also in an ‘AI scapegoat’ moment. To markets and investors, layoffs usually read as: something is wrong. But if you can pin the layoff on AI, the story flips to something going ‘right,’ or ‘we’re strong,’ ‘we’re upgrading’ and ‘we’re ahead of the curve.’ It’s a reputational hack that allows companies to reframe their workforce decisions as steps forward, not backwards.
It gives investors a progress storyline, gives the media a dramatic frame (‘humans vs. machines’), and gives leaders cover to make cuts without looking like the business is wobbling.”
Earlier this month, Challenger, Gray & Christmas reported that US firms laid off 108,435 workers in January, led by transportation and tech.
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