Americas Job Market Just Got Some Troubling News In-Depth, Analysis of the Latest Jobs Report

The latest U.S. jobs report presents a mixed and unsettling picture of the world’s largest economy. According to the Bureau of Labor Statistics data released in December 2025, the economy added 64,000 jobs in November, exceeding expectations, but this followed a loss of 105,000 jobs in October largely due to reductions in federal employment. At the same time, the unemployment rate climbed to 4.6%, the highest level in more than four years.

On the surface, the headline payroll gain may seem reassuring. But beneath it lies a labor market that is cooling, uneven, and potentially vulnerable to further weaknesses.

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What the Numbers Say Payrolls and Unemployment Explained

Jobs Added and Lost

• November 2025: U.S. employers added 64,000 jobs, above economists’ forecast of around 40,000, largely driven by gains in healthcare (46,000) and construction (28,000).
• October 2025: The economy lost 105,000 jobs, primarily due to a large drop in federal government employment around 162,000 federal positions were cut.

The delayed release of both months’ data a result of a 43-day federal government shutdown means that October’s report is only now seeing the light of day, complicating trend analysis.

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Unemployment Rate Surges

The unemployment rate climbed to 4.6% in November 2025, its highest reading since September 2021, up from 4.4% in September and above many forecasts.

A rising unemployment rate during a period of modest job gains reflects a labor market losing steam with more workers searching for jobs than are being absorbed by new hiring.

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Why This Matters Signs the Labor Market Is Cooling

Economists and analysts point to several concerning trends

Mixed Job Growth

While November’s jobs gain beat expectations, the large October loss and significant downward revisions to earlier months suggest the recovery lacks momentum.

Weak Manufacturing and Slow Wage Growth

Manufacturing job losses continued, and wage growth has slowed, indicating that even employed workers aren’t seeing rapid income gains.

Broader Slowdown in Recent Hiring

Payroll gains have trended down in recent months compared with prior years, and the increasing unemployment rate points to slack in the labor market.

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Context What’s Causing the Weakness?

Several factors are likely contributing to the slowdown

Federal Workforce Reductions

Cuts to government employment have weighed heavily on overall payroll figures.

Economic Uncertainty

Policy uncertainty from tariffs to immigration policy and broader global economic pressures have dampened hiring enthusiasm among employers.

Impact of Shutdown on Data

The extended government shutdown not only delayed jobs data but may also have distorted the accuracy of surveys, making it harder to interpret shifts in real time.

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Federal Reserve and Monetary Policy Implications

The Federal Reserve closely watches labor market conditions when setting monetary policy. A rising unemployment rate and slowing job gains provide justification for continued accommodative measures, including potential future interest rate cuts to support economic growth.

At the same time, policymakers must balance this against inflation risks and broader economic performance.

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ltas Opinion What All This Really Means

At Altas, our view is that the latest labor market data point to a transition from a historically tight jobs market to one that is more balanced or even weakened.

The Good News

• November’s job gain beating forecasts shows that employers are still hiring in pockets of the economy.
• Certain sectors like healthcare and construction remain sources of employment growth.

The Warning Signs

• A rising unemployment rate especially to 4.6% suggests more people are seeking work than are finding it.
• The large federal layoffs distort overall trends and highlight vulnerability in public sector employment.

The Broader Concern

Labor market cooling could spill into consumer confidence and spending, which drives a large portion of U.S. economic output.

Altas Verdict
The U.S. job market is no longer overheating it is entering a slower, more fragile phase. The combination of delayed data, significant job losses, and elevated unemployment requires cautious interpretation and suggests that economic headwinds could persist into 2026.

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FAQs

Q1: Why did the unemployment rate rise despite job gains?

Because the unemployment rate measures the share of people actively seeking work. If more people re-entered the labor force or if job gains are small relative to those searching for jobs, the rate can rise even with payroll increases.

Q2: How did the government shutdown affect jobs data?

The 43-day shutdown paused critical data collection for household surveys, delaying and complicating normal labor statistics releases for October and November.

Q3: Are wage growth trends improving?

No wage growth remains slow, with minimal month-to-month increases, suggesting weak labor bargaining power.

Q4: Does a high unemployment rate always mean a recession?

Not necessarily, but sustained increases in the unemployment rate often precede or coincide with slower economic growth.

Q5: What sectors are still adding jobs?

Healthcare and construction showed the majority of gains in November.

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