AM's Unemployment Rate for December 2025 Falls to 11.80%, Marking a Significant Improvement
The latest data from the Sigmanomics database reveals that AM's unemployment rate for December 2025 dropped to 11.80%, well below the market consensus of 13.00%. This marks a notable improvement from November 2025, when the rate stood at 13.40%, and continues a downward trend from mid-2025 highs. This report examines the geographic and temporal context, core macroeconomic indicators, monetary and fiscal policy influences, external risks, financial market reactions, and structural trends shaping this labor market development.
Table of Contents
Geographic & Temporal Scope
The unemployment rate data pertains to AM, covering the month of December 2025, released on January 12, 2026. The Sigmanomics database provides a consistent historical series, enabling month-over-month (MoM) and year-over-year (YoY) comparisons. December’s 11.80% rate is the lowest since July 2024, when unemployment was 15.50%, signaling a sustained recovery in the labor market over the past 18 months.
Drivers This Month
- Improved industrial output and services sector hiring contributed to job gains.
- Seasonal employment in retail and logistics boosted labor participation.
- Government retraining programs and incentives helped reduce structural unemployment.
Policy Pulse
The unemployment rate now sits below the central bank’s estimated natural rate of 12.50%, suggesting tightening labor market conditions. This may influence the monetary authority’s stance on interest rates, potentially slowing further hikes.
Market Lens
Following the release, the USDEUR currency pair saw a modest appreciation of 0.15%, reflecting improved confidence in AM’s economic outlook. Short-term yields on government bonds also edged lower, pricing in a reduced risk premium.
Core Macroeconomic Indicators
December’s unemployment rate of 11.80% compares favorably to November’s 13.40% and October’s 13.90%, marking a 1.60 percentage point MoM decline. The 12-month average unemployment rate stands at 13.30%, underscoring the recent improvement. Inflation remains moderate at 3.20% YoY, while GDP growth for Q4 2025 is estimated at 2.80%, supporting labor demand.
Monetary Policy & Financial Conditions
The central bank has maintained a cautious tightening cycle since mid-2025, with the policy rate at 5.25%. Improved labor market conditions may prompt a pause or slower pace in rate hikes. Financial conditions have eased slightly, with credit spreads narrowing and consumer confidence rising.
Fiscal Policy & Government Budget
Fiscal stimulus through targeted job training and infrastructure spending has supported employment gains. The government’s budget deficit narrowed to 3.10% of GDP in Q4 2025, reflecting improved tax revenues from higher employment and economic activity.
This chart highlights a strong downward trend in unemployment, reversing a six-month rise. The labor market is trending upward in strength, suggesting that AM’s economy is gaining momentum and may soon face labor shortages, which could fuel wage growth and inflationary pressures.
Market Lens
Immediate reaction: The AMTECH stock index rallied 1.20% within the first hour, reflecting investor optimism about economic recovery. Meanwhile, the AMBTC crypto pair showed increased volatility but ended flat, indicating mixed sentiment in risk assets.
Forward Outlook
Looking ahead, three scenarios emerge for AM’s unemployment trajectory:
- Bullish (30% probability): Continued economic expansion and successful structural reforms drive unemployment below 10% by mid-2026.
- Base (50% probability): Labor market stabilizes around 11-12%, with moderate growth and manageable inflation.
- Bearish (20% probability): External shocks or geopolitical tensions disrupt growth, pushing unemployment back above 13%.
External Shocks & Geopolitical Risks
Risks remain from regional geopolitical tensions and global supply chain disruptions. Any escalation could dampen investment and employment. However, current diplomatic efforts and diversified trade partnerships mitigate these risks.
Structural & Long-Run Trends
Long-term trends such as digital transformation and demographic shifts continue to reshape AM’s labor market. The government’s focus on upskilling and innovation is critical to sustaining employment gains and productivity growth.
December 2025’s unemployment rate of 11.80% signals a meaningful improvement in AM’s labor market, supported by solid GDP growth, prudent monetary policy, and targeted fiscal measures. While risks remain, the data suggest a positive macroeconomic trajectory heading into 2026. Investors and policymakers should monitor labor market tightness as a key indicator for inflation and growth dynamics.
Key Markets Likely to React to Unemployment Rate
The unemployment rate is a critical barometer for AM’s economic health and influences multiple asset classes. The following markets historically track labor market shifts closely:
- AMTECH – AM’s leading stock index, sensitive to economic growth and employment trends.
- USDEUR – Currency pair reflecting cross-border capital flows influenced by AM’s economic outlook.
- AMBTC – Cryptocurrency pair showing risk sentiment linked to macroeconomic stability.
- AMDCAD – Forex pair impacted by commodity prices and labor market conditions.
- AMFIN – Financial sector index, sensitive to interest rate expectations driven by employment data.
Insight Box: Unemployment Rate vs. AMTECH Index Since 2020
Since 2020, the unemployment rate and AMTECH index have exhibited a strong inverse correlation. Periods of rising unemployment, such as mid-2024, coincided with market sell-offs, while declines in unemployment, like the current trend, have supported sustained equity rallies. This relationship underscores the importance of labor market data as a leading indicator for AM’s equity performance.
FAQs
- What does the December 2025 unemployment rate indicate about AM’s economy?
- The 11.80% rate suggests improving labor market conditions and economic recovery momentum in AM.
- How does this unemployment data affect monetary policy?
- Lower unemployment may reduce pressure for further rate hikes, signaling a potential pause in tightening.
- What are the main risks to the unemployment outlook?
- Geopolitical tensions and external shocks could reverse gains, increasing unemployment above 13%.
Key takeaway: AM’s December 2025 unemployment rate decline to 11.80% marks a pivotal improvement, supporting a cautiously optimistic economic outlook for 2026.
Updated 1/12/26
This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.
The unemployment rate for December 2025 registered a sharp decline to 11.80%, down from 13.40% in November and 13.90% in October. This figure is also well below the 12-month average of 13.30%, indicating a clear reversal of the upward trend seen through mid-2025.
Seasonal hiring and structural reforms have contributed to this improvement, as reflected in the steady GDP growth and stable inflation backdrop. The labor market tightening is consistent with the central bank’s inflation targeting framework and signals resilience amid external uncertainties.