The U.S. labor market delivered a mixed bag of news this December, as new government data revealed both signs of resilience and worrying cracks beneath the surface. According to the Bureau of Labor Statistics (BLS), the economy added 64,000 jobs in November 2025, surpassing economists’ predictions of 40,000. However, the unemployment rate climbed to 4.6%—its highest level in four years—underscoring persistent challenges for job seekers across the country.
This latest employment snapshot, released on December 16, comes with asterisks. The data was delayed nearly two weeks due to the historic 43-day federal government shutdown that stretched from October 1 to November 12. This blackout hamstrung official data collection and left October’s employment report incomplete—the first time in almost eight decades that a monthly snapshot lacked an unemployment rate. As a result, November’s report was a catch-up, packaging partial October data with the latest figures and including technical notes about the reliability of the numbers.
October’s jobs report revealed a steep loss of 105,000 positions, driven almost entirely by the federal government shedding 162,000 jobs. This was a direct result of the Trump administration’s Department of Government Efficiency initiative, which slashed funding and implemented “fork in the road” deferred resignations effective September 30. The impact of these cuts was felt acutely in the public sector: from January through November, the U.S. economy added 499,000 jobs overall, with private-sector gains of 687,000 offset by a loss of 188,000 government jobs.
While the White House was quick to tout the private sector’s performance as a sign of a “strong, American First economy,” economists noted that the pace of job creation remains worryingly weak. “The nation has added a mere 100,000 jobs in the past six months,” wrote Heather Long, chief economist at Navy Federal Credit Union, in a commentary cited by CNN. She added, “The bulk of those jobs were in health care, an industry that is almost always hiring due to America’s aging population. Almost all other sectors are flatlining or laying workers off right now.”
Indeed, health care and social assistance continued to dominate employment gains, adding 64,000 jobs in November and 64,600 in October. Construction followed distantly, with 28,000 new jobs last month. In contrast, sectors such as manufacturing, transportation, and leisure and hospitality all experienced job losses, reflecting a broader trend of stagnation and contraction across much of the economy.
The labor market’s cooling has been gradual but unmistakable. Federal Reserve Bank of New York president John C. Williams described the trend as “an ongoing, gradual process, without signs of a sharp rise in layoffs or other indications of rapid deterioration.” Still, he acknowledged, “Job growth has been anemic.”
One key factor behind the rising unemployment rate is not a sudden spike in layoffs, but rather the growth of the overall labor force. More Americans are re-entering the workforce or looking for jobs, outpacing the number of new positions available. This dynamic has pushed the labor force participation rate slightly higher and contributed to the increase in joblessness. The number of people reporting permanent job losses has actually declined, further highlighting the “low-hire, low-fire” nature of the current job market, as noted by Wells Fargo economists in a note to investors.
Some demographic groups are feeling the pain more acutely. The unemployment rate for Black workers jumped to 8.3% in November, the highest level in four years. Young workers are also struggling: the jobless rate for 16-to-24-year-olds rose to 10.6%, with high school graduates and entry-level job seekers facing mounting challenges—particularly as traditionally blue-collar sectors like manufacturing and trucking shed jobs.
Artificial intelligence is playing an increasingly prominent role in shaping these trends. According to the Federal Reserve’s November Beige Book, several manufacturers reported using AI tools and automation to boost productivity, enabling them to reduce office staff by 15% or skip recruiting new entry-level workers altogether. Major layoffs at companies such as Amazon (14,000 cuts) and Verizon (13,000 cuts) have been attributed to the adoption of AI technologies. While these advances can make businesses more efficient, they are also reducing the need for human workers, especially in positions that once served as gateways to the middle class.
Wage growth, another crucial indicator of economic health, has also slowed. Americans’ average hourly earnings grew at an annual rate of just 3.5% in November—the slowest pace in more than four years. As Nicole Bachaud, chief economist at ZipRecruiter, told CNN, “That will further impact consumer spending.” With inflation running at a 3% rate in September, the gap between rising prices and sluggish wage gains is narrowing, putting additional pressure on household budgets.
Adding to the uncertainty, the reliability of the latest jobs data has come under scrutiny. The BLS noted that November’s household survey required more complex adjustments due to lower response rates and the absence of October data, potentially affecting the accuracy of the unemployment rate. Federal Reserve Chair Jerome Powell acknowledged these concerns, stating the central bank would view the October and November numbers with a “somewhat skeptical eye.” Kay Haigh, global co-head of fixed income and liquidity solutions at Goldman Sachs Asset Management, echoed this sentiment, suggesting that the December employment report—due in early January—will be a more meaningful indicator for policymakers.
Despite these headwinds, there are a few silver linings. Lower energy prices have provided some relief for consumers, with the national average price of regular gasoline dropping to $2.91 a gallon—the lowest since May 2021. Retail sales in October remained flat, but consumer spending overall has yet to see a sharp decline, thanks in part to continued job growth in certain sectors and modest wage gains.
Nevertheless, the broader picture is sobering. The U.S. economy is on track for its weakest year of job growth since the pandemic in 2020, and before that, the Great Recession. As Laura Ullrich, director of economic research for the Indeed Hiring Lab, observed, “The latest jobs report paints a sobering picture of a job market that may officially be turning frigid after a prolonged cooling period.”
As the Federal Reserve weighs its next moves—having already cut rates by a quarter point for three consecutive meetings—investors and policymakers alike are watching closely for signs of recovery or further deterioration. For now, the labor market remains in a precarious balance, offering hope to some but leaving many Americans searching for stability in uncertain times.