Why Did U.S. Job Growth Slow in November as Unemployment Rose to 4.6%?

In November 2025, the U.S. economy added just 64,000 jobs, a significant slowdown compared to prior months, while the unemployment rate rose sharply from 3.7% to 4.6%. This divergence between job additions and rising unemployment has drawn attention as a potential signal of shifting labor market dynamics amid ongoing economic uncertainty.

What happened

According to data released by the U.S. Bureau of Labor Statistics (BLS), the U.S. labor market exhibited a notable slowdown in November 2025. Total nonfarm payroll employment increased by 64,000, a marked deceleration relative to previous months. Concurrently, the unemployment rate climbed to 4.6%, up from 3.7% in October. The labor force participation rate held relatively steady, showing no significant increase to counterbalance the rise in unemployment.

Sectoral trends within the employment report showed uneven performance. Manufacturing and retail sectors experienced weakness in job growth, while healthcare and government jobs recorded modest gains. Wage growth, a key indicator of labor market tightness and inflationary pressure, moderated compared to prior months, suggesting less upward pressure on labor costs.

Economists cited by The Wall Street Journal interpret this slowdown and the rise in unemployment as indicative of a cooling labor market after a sustained period of tightness. Bloomberg’s analysis of the BLS data highlights that the simultaneous increase in unemployment and job additions suggests a rise in labor force participation—more people entering or re-entering the job market—temporarily increasing the number of unemployed individuals.

Reuters reports that some analysts view these developments as possibly reflecting a structural shift, with employers adopting a more cautious hiring stance amid economic uncertainty and risks of recession. Meanwhile, CNBC notes that the moderation in wage growth may alleviate inflationary pressures and could influence the Federal Reserve’s decisions on interest rate hikes.

Why this matters

The November employment figures carry implications beyond the immediate monthly snapshot. The slowdown in job growth combined with a rising unemployment rate signals a potential transition in labor market conditions, moving from a historically tight environment toward a more balanced or cooling phase. This has direct relevance for monetary policy, inflation trajectories, and broader economic stability.

The Federal Reserve’s monetary tightening campaign, aimed at restraining inflation, is widely regarded as a key factor influencing labor market dynamics. The moderation in wage growth, alongside slower job creation, could reduce upward pressure on prices, potentially giving the Fed latitude to pause or slow further rate increases. This is consequential for financial markets and economic forecasts.

Moreover, the rise in unemployment despite job gains points to increased labor supply, which may reflect demographic changes, shifts in worker preferences, or improved confidence prompting more individuals to seek employment. If sustained, this could reshape the bargaining power balance between workers and employers, with implications for wage growth and consumer spending.

Sector-specific weaknesses in manufacturing and retail may also highlight underlying structural challenges, such as automation, supply chain adjustments, or changing consumer behavior. Conversely, stability in healthcare and government employment suggests some resilience in traditionally less cyclical sectors.

What remains unclear

Several important questions remain unresolved by the available data and analyses. It is unclear how much of the rise in unemployment stems from cyclical factors, such as the lagged effects of monetary policy tightening, versus structural changes including technological shifts or demographic trends.

The report does not provide detailed insights into the composition of the unemployed population—such as the proportion of discouraged workers, long-term unemployed, or those transitioning between jobs—which could influence interpretations of labor market health.

Potential seasonal adjustments or one-off factors affecting November’s employment figures, such as strikes or weather events, are not fully explained in the data, leaving room for uncertainty about the persistence of these trends.

Additionally, the role of gig economy or informal employment sectors, which may not be fully captured in official statistics, remains unclear. This limits the understanding of the true extent and nature of labor market slack.

Finally, forward-looking indicators like job openings, layoffs, and quits rates are not detailed in the primary source, constraining assessments of whether the labor market slowdown will continue or reverse in the near term.

What to watch next

Upcoming monthly employment reports for December and early 2026 to determine if the slowdown and rising unemployment trend persist or reverse.
Federal Reserve communications and policy decisions to assess whether the moderation in wage growth and labor market cooling influence the pace of interest rate adjustments.
Data releases on labor force participation rates to clarify whether increased unemployment is linked primarily to more people entering the workforce.
Sector-specific employment and productivity data, especially in manufacturing and retail, to evaluate structural versus cyclical drivers of job growth weakness.
Additional information on gig economy participation and informal employment to better understand labor market slack beyond official statistics.

The November 2025 employment data underscore a complex labor market transition marked by slower job growth and rising unemployment amid steady labor force participation and moderated wage increases. While these trends suggest a cooling labor market influenced by monetary policy and broader economic factors, significant uncertainties remain about the underlying causes and future trajectory. Careful monitoring of forthcoming data and policy signals will be essential to fully understand the evolving labor market landscape.

Source: https://www.coindesk.com/markets/2025/12/16/u-s-added-64-000-jobs-in-november-with-unemployment-rate-jumping-to-4-6. This article is based on verified research material available at the time of writing. Where information is limited or unavailable, this is stated explicitly.