Continued Economic Uncertainty Leaves Employers Hesitant and Workers Waiting
The United States gained a modest 64,000 jobs in November but lost 105,000 in October as federal workers departed following Trump administration cutbacks, according to delayed government reports released Tuesday.
The unemployment rate rose to 4.6% last month, its highest level since 2021.
November’s job gains came in above economists’ expectations of 40,000. The October losses were driven largely by a steep drop of 162,000 federal workers, many of whom resigned at the end of fiscal year 2025 on Sept. 30. Those departures followed pressure from billionaire Elon Musk’s aggressive effort to shrink U.S. government payrolls.
Revisions from the Labor Department also reduced payroll totals for August and September by a combined 33,000 jobs.
Hiring has continued to lose momentum as uncertainty surrounding President Donald Trump’s tariffs and the lingering effects of high interest rates weigh on employers. Since March, job creation has averaged just 35,000 per month, down from an average of 71,000 in the year that ended in March.
Both the October and November employment reports were released late because of the 43-day federal government shutdown, complicating decision-making at the Federal Reserve. Policymakers there remain divided over whether the labor market needs additional support from lower interest rates.
Concerns about weakening job growth were enough to push the Fed to cut its benchmark interest rate by a quarter of a percentage point last week for the third time this year. Still, three Fed officials dissented, the most opposition to a rate decision in six years. Two voted to keep rates unchanged while inflation remains above the Fed’s 2% target, while Stephen Miran, appointed to the Fed’s governing board by Trump in September, supported a larger cut aligned with the president’s preferences.
Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics, said the labor market remains weak but is deteriorating too slowly to force another rate cut in January, when the Fed meets again on Jan. 27–28.
The unemployment rate has been climbing steadily since hitting a 54-year low of 3.4% in April 2023. It rose from 4.4% in September, and the labor force increased by 323,000 people, reflecting more Americans working or looking for work. An October unemployment rate was not available because of the shutdown.
White House National Economic Council Director Kevin Hassett said the uptick likely reflects former federal workers searching for new jobs after accepting buyouts. He said those workers are counted as unemployed until they find new positions.
The outlook could worsen in coming months. Fed Chair Jerome Powell said last week that hiring may have been overstated by roughly 60,000 jobs per month since spring, suggesting the labor market has cooled more than previously believed.
Wage growth also slowed. Average hourly earnings rose just 0.1% from October, the smallest increase since August 2023. Compared to a year earlier, pay was up 3.5%, the weakest annual gain since May 2021.
Health care led job growth in November, adding more than 46,000 jobs and accounting for more than two-thirds of private-sector hiring. Construction added 28,000 jobs, while manufacturing continued to contract, losing 5,000 jobs for the seventh straight month.
Economists say employers are hesitant to hire but also reluctant to lay off workers, a dynamic that has contributed to the steady rise in unemployment. Labor demand has cooled faster than labor supply, driving the increase.
Automation and artificial intelligence are adding another layer of uncertainty. Staffing executives report cooling in logistics and transportation as robotics and automation reduce the need for workers.
With economic data delayed by the shutdown, federal agencies are still catching up. The Labor Department released the September jobs report seven weeks late and only partially released October data alongside November’s report.
Employers are largely holding onto their current workforce but remain cautious about expanding, citing uncertainty around artificial intelligence adoption and Trump’s unpredictable economic policies, including steep tariffs on imports.
For jobseekers, the hesitation has made finding work increasingly difficult. Amy Beckrich, 54, of Farmington, Minnesota, lost her human resources job in May and has applied to more than 100 positions since. Interviews have been scarce, and one recruiter failed to show up altogether. Her unemployment benefits expired this month.
“It’s tough going into the holidays without any prospects or income,” Beckrich said, adding that her family has cut back on spending and delayed replacing their car. “I feel like the hiring system is broken. The human factor has completely disappeared.”
