The U.S. labor market added 64,000 jobs in November and the unemployment rate ticked up to 4.6 percent the highest since 2021, underscoring concerns about the strength of the economy.
The long-awaited jobs report by the Labor Department was delayed because of the federal government shutdown, creating headaches for economists and policymakers trying to assess how the labor market slowed this fall, as President Trump’s economic policies, including higher tariffs and immigration enforcement, continue to take hold.
“The labor market is cooling,” said Guy Berger, director of economic research at the Burning Glass Institute, a company that conducts research on the labor market. “That’s a change from where we were during early summer when it looked like things were relatively stable. But data seems to be moving in the wrong direction again.”
The report does not contain the unemployment rate for October because the government could not collect survey data during the shutdown, a first for the agency since the survey began in 1948.
The deferred resignations of tens of thousands of civil servants from the federal government, a program launched by the Trump administration earlier this year, weighed on the labor market in October.
The labor market has been softening since June, with hiring sputtering to near the lowest level in more than a decade and the unemployment rate rising. Headwinds including tariffs, inflation and cautious consumer spending have prompted employers to suspend hiring. Meanwhile, some white-collar employers have laid off employees or announced cuts this fall, especially amid the growth of artificial intelligence, which can make some jobs redundant. Still, filings for unemployment insurance, the closest to a real-time gauge for layoffs in the broader economy, remain low, although they ticked up last Thursday.
“Businesses need certainty when they go and make their hiring decisions and their investment plans, and when there’s uncertainty in the economy, it just makes things harder,” said Sam Kuhn, an economist with the recruitment software company Appcast. “I don’t know whether it’s necessarily that businesses are doing worse, or if it’s just the fact that they are perhaps waiting to see what could happen in 2026.”
Federal Reserve Chair Jerome H. Powell last week cited a softening labor market in his justification for cutting interest rates for the third time this year. Powell also warned that official statistics may be overstating job creation by 60,000 jobs a month, calling jobs data “a complicated, unusual, and difficult situation.”
But so few people are entering the labor market, in part due to the Trump administration’s immigration enforcement, that the economy no longer needs to pump out hundreds of thousands of jobs a month to keep the unemployment rate steady. Economists say it’s possible that creating around 50,000 jobs a month could keep the unemployment rate stable.
A number of high-profile layoffs this fall have fueled unease about the state of the labor market. The rate of layoffs rose substantially in October, a separate jobs report released by the Labor Department on Monday showed. But preliminary estimates from the Cleveland Federal Reserve show that around 20,000 Americans in 16 states received layoff notices in November through the Warn Act, a significant decrease from about 36,000 reported in October for the same states.
Since the government shutdown, economists and policymakers have been largely relying on data collected by private parties, such as ADP and Revelio Labs, to appraise the state of the labor market. Those reports showed the labor market shrinking in November.
“If you’re a worker that just freshly got laid off or are looking for new work, there’s not a lot of companies hiring right now,” said Kuhn, the Appcast economist.
Andrew Ackerman contributed to this report.
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