The US labor market is experiencing a significant downturn as 2025 comes to a close, raising concerns about the state of the economy.
Key Highlights
- Unemployment rate rises to 4.6%, the highest level since late 2021
- Payrolls growth slows down, with only 64,000 jobs added in November
- Sector performance is mixed, with Health Care and Construction showing growth, while Federal Government sheds workers
Job Market Trends
The economy added a meager 64,000 jobs in November, barely offsetting the massive loss of 105,000 jobs in October. The number of people working part-time for economic reasons surged by 909,000 since September, indicating a shift toward involuntary part-time work.
Sector Performance
Health Care (+46,000) and Construction (+28,000) were among the few sectors that showed growth, while the Federal Government shed workers following a wave of deferred resignations.
Wage Growth and Unemployment
Wage growth remains steady at 3.5% annually, but the sharp rise in teenage unemployment (16.3%) and a softening white-collar market suggest the job market is cooling down.
Outlook
The labor market's downturn is likely to dominate the 2026 outlook, with many experts predicting a "jobs recession".
