CORRECTION: An earlier version of this story incorrectly used the word “employment” rather than “unemployment” in the headline. That was an error and has been corrected. As stated in the article, the U.S. unemployment rate is now at its highest point since 2021.
The United States gained a decent 64,000 jobs in November but lost 105,000 in October as federal workers departed after cutbacks by the Trump administration, the government said in delayed reports.
The unemployment rate rose to 4.6 per cent, the highest since 2021.
Both the October and November job creation numbers, released Tuesday by the Labor Department, came in late because of the 43-day federal government shutdown.
American companies are mostly holding onto the employees they have. But they’re reluctant to hire new ones as they struggle to assess how to use artificial intelligence and how to adjust to U.S. President Donald Trump’s unpredictable policies, especially his double-digit taxes on imports from around the world.
The uncertainty leaves jobseekers struggling to find work or even land interviews. Federal Reserve policymakers are divided over whether the labor market needs more help from lower interest rates. Their deliberations are rendered more difficult because official reports on the economy’s health are coming in late and incomplete after a 43-day government shutdown.
Forecasters surveyed by the data firm FactSet expected employers added an unimpressive 40,000 jobs last month and that unemployment stayed at 4.4 per cent, unchanged from the last rate published – for September.
Get breaking National news
Hiring has clearly lost momentum, hobbled by uncertainty over Trump’s tariffs and the lingering effects of the high interest rates the Fed engineered in 2022 and 2023 to rein in an outburst of inflation.
Labor Department revisions in September showed that the economy created 911,000 fewer jobs than originally reported in the year that ended in March. That meant that employers added an average of just 71,000 new jobs a month over that period, not the 147,000 first reported. Since March, job creation has fallen farther — to an average 59,000 a month.
During the 2021-2023 hiring boom that followed COVID-19 lockdowns, by contrast, the economy was creating an average of 400,000 jobs a month.
The unemployment rate, though still modest by historical standards, has risen since bottoming out at a 54-year low of 3.4 per cent in April 2023.
Adding to the uncertainty is the growing use of artificial intelligence and other technologies that can reduce demand for workers.
“We’ve seen a lot of the businesses that we support are stuck in that stagnant mode: ‘Are we going to hire or are we not? What can we automate? What do we need the human touch with?’’’ said Matt Hobbie, vice president of the staffing firm HealthSkil in Allentown, Pennsylvania.
“We’re in Lehigh Valley, which is a big transportation hub in eastern Pennsylvania. We’ve seen some cooling in the logistics and transportation markets, specifically because we’ve seen automation in those sectors, robotics.’’
Worries about the job market were enough to nudge the Fed into cutting its benchmark interest rate by a quarter of a percentage point last week for the third time this year.
But three Fed officials refused to go along with the move, the most dissents in six years. Some Fed officials are balking at further cuts while inflation remains above the central bank’s two per cent target. Two voted to keep the rate unchanged. (Stephen Miran, appointed by Trump to the Fed’s governing board in September, voted for a bigger cut – in line with what the president demands.)
Fed Chair Jerome Powell warned after last week’s rate cut that the job market is even weaker than it appeared.
Government data show that the economy has added less than 40,000 jobs a month since April. But even that overstates the pace of hiring, Powell said. He suspects that revisions could reduce payrolls by as much as 60,000 a month, which would mean employers haven’t been adding jobs at all; instead, they’ve been cutting 20,000 a month since the spring. “It’s a labor market that seems to have significant downside risks,” Powell told reporters.
- Trump will deliver White House address Wednesday night, doesn’t say on what
- Canadian Jewish group calls for action after threat report warns of possible attacks
- 15 injured after San Francisco cable car stops abruptly, throwing passengers
- Trump expands U.S. travel ban and restrictions to 20 more countries
Because of the government shutdown, the Labor Department did not release its jobs reports for September, October and November on time.
It finally put out the September jobs report on Nov. 20, seven weeks late. It will publish some of the October data – including a count of the jobs created that month by businesses, nonprofits and government agencies – along with the November report Tuesday. But it will not release an unemployment rate for October because it could not calculate the number during the shutdown.
The October numbers are expected to show a big drop in U.S. government jobs, reflecting the delayed impact of billionaire Elon Musk’s purge of the federal workforce as the head of the Department of Government Efficiency, or DOGE.
Analysts at Evercore ISI, a research outfit, noted in a commentary last week that about 150,000 federal workers agreed to take a buyout under pressure from DOGE – and that 100,000 likely left the government when the 2025 fiscal year ended on Sept. 30, pushing down October payrolls. The remaining 50,000 stayed on for the rest of the calendar year and their departures will likely show up in the January 2026 jobs report.
Comments