US Unemployment Hits Four-Year High as Job Growth Slows: November Jobs Report Reveals Deepening Labor Market Strains

Unemployment Rate Climbs to 4.6%: The Highest Since 2021

America’s job market closed 2025 on a somber note, as the Bureau of Labor Statistics (BLS) reported that the national unemployment rate rose to 4.6% in November—the highest level seen since September 2021. This uptick caps a turbulent period, marked by government shutdowns, delayed economic data, and a string of downward revisions that have further muddied the outlook for both workers and policymakers.

According to the BLS, the economy lost a staggering 105,000 jobs in October, only to recoup a modest 64,000 positions in November. The figures released on Tuesday were accompanied by technical caveats: the longest federal shutdown in US history hampered data collection, leading to a rare partial release for October and full reporting only for November. Notably, October’s snapshot became the first in nearly eight decades to exclude the unemployment rate altogether—a stark sign of how disruptions have rippled through even the most fundamental government metrics.

Federal Shutdown Skews Data, Sectoral Shifts Shape Recovery

The federal shutdown didn’t just delay numbers—it skewed them. Critical surveys, especially those relying on in-person or phone responses, were scrapped or compressed, forcing statisticians into more back-end math and leaving economists to parse reports with a healthy dose of skepticism. The October job losses were also compounded by deferred resignations among federal workers, notably those tied to the now-defunct Department of Government Efficiency.

Despite these complications, one pattern emerged clearly: job growth is failing to keep pace with the influx of new workers. Over the past three months, the US has added an average of just 22,333 jobs per month, far below the breakeven rate of 30,000 to 50,000 needed to maintain stable unemployment. Even with fewer immigrants and a wave of baby boomer retirements lowering the breakeven bar, the current pace falls short—explaining the steady climb in joblessness from 4.4% in September to 4.6% in November.

Sectoral data reveals health care as the rare bright spot, with 46,000 new jobs in November, reflecting the demands of an aging population. Construction also saw a modest uptick of 28,000 positions. Yet, most other industries faltered: transportation and warehousing lost more than 18,000 jobs, leisure and hospitality shed 12,000 roles, and manufacturing, retail, and information sectors remained stagnant. As ADP’s chief economist Nela Richardson warned, the slowdown in leisure and hospitality is “the most concerning trend” for the broader economy.

Wage Growth Slows, Youth Unemployment Surges

While wage growth continues to outpace inflation, the margin is narrowing. In November, average hourly earnings rose just 0.1%, with annual wage growth settling at 3.5%—its slowest rate in more than four years. This deceleration is especially pronounced among young workers, a demographic long seen as an early warning signal for economic weakness.

For Americans aged 16 to 24, unemployment spiked to 10.6% in November, the highest since 2021, with more than 2 million young people actively seeking work. The rate for 16-to-19-year-olds hit 16.3%, up from 13.2% in September, as entry-level positions in traditionally stable sectors like manufacturing and trucking evaporated. Even among 20-to-24-year-olds, the unemployment rate, though down slightly from September, remains historically elevated, and wage growth for young workers—once robust—has dropped to its lowest level in a decade.

Federal Reserve Faces Tough Choices Amid Economic Crosswinds

Against this backdrop, the Federal Reserve finds itself balancing competing priorities. With the labor market cooling and inflation reaccelerating, the central bank is walking a tightrope. Fed Chair Jerome Powell has been candid: “We are trying to keep inflation under control, but also support the labor market and strong wages, so that people are earning enough money and feeling economically healthy again.” Last week, the Fed cut rates for the third time this year, signaling that further reductions may be harder to justify unless the data worsens.

Wall Street’s response has been muted, reflecting uncertainty rather than panic. The Dow, S&P 500, and Nasdaq all slipped modestly on Tuesday after the report, while traders looked to future data—especially December’s jobs numbers—to clarify the Fed’s next moves. As Krishna Guha of Evercore ISI noted, “We do not think this was weak enough to spur another near-term rate cut.” Yet, with equities struggling to regain momentum and yields drifting, the picture remains muddled.

Retail Sales Flat, Consumer Spending Under Pressure

It’s not just the labor market showing signs of fatigue. Retail sales in October were flat, marking the weakest reading in five months. Falling car and gasoline sales dragged down the numbers, though some categories—furniture, sporting goods, and online—posted gains. With consumer spending accounting for two-thirds of US economic activity, any sustained slowdown here could amplify the drag from a flagging jobs market.

Still, Americans haven’t cut back outright, perhaps buoyed by falling gas prices and lingering resilience in some sectors. But the combination of higher unemployment, sluggish wage growth, and tariff-driven inflation could test that resilience in the months ahead.

Downward Revisions Paint a Darker Picture

Tuesday’s report also included downward revisions for August and September, with employment now 33,000 lower than previously estimated. The economy has lost jobs in three of the last six months—a streak not seen since the pandemic. The average monthly gain of 55,455 jobs through November puts 2025 on track for the weakest year of job growth since Covid, and possibly since the Great Recession.

There are now 7.8 million Americans out of work, according to the latest figures, with many experts pointing to stricter immigration policies and corporate buyouts as contributing factors. As Chris Rupkey of FwdBonds bluntly observed, “There are no jobs out there for American workers that have been laid off.”

Amid a sea of technical adjustments and delayed data, the November 2025 jobs report delivers a clear message: the US labor market is losing momentum, with unemployment rising, job creation lagging, and wage growth slowing. While some sectors—health care and construction—offer glimmers of hope, the broader picture is one of caution and unresolved tension. The coming months will test the resilience of both workers and policymakers, as the country faces its weakest job market in years and the Fed weighs its next moves against a backdrop of persistent economic uncertainty.