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As 2025 comes to a close, the U.S. labor market is no longer flashing red—but it’s clearly flashing yellow.
The latest jobs report, released with weeks of delay due to the federal government shutdown, confirms what workers and employers alike have been sensing all year: hiring is slowing, job security feels shakier, and the post-pandemic labor boom is firmly in the rearview mirror.
In November, U.S. employers added just 64,000 jobs, according to the Labor Department. The unemployment rate ticked up to 4.6%, its highest level in more than four years, up from 4.4% in September. While these figures don’t point to an immediate crisis, they underscore a labor market that is losing momentum—and doing so in a sort of lopsided fashion.
A Shutdown-Skewed Snapshot
The timing of this report matters. The delayed jobs data for both October and November included some abbreviated data for October due to the government shutdown.
That disruption masked a sharper downturn in October, when the U.S. economy recorded a net loss of 105,000 jobs. Much of that decline stemmed from the federal workforce, where 162,000 government employees who had taken buyouts earlier in the year were officially removed from payrolls.
Complicating matters further, furloughed federal workers were unable to conduct the household survey in October, leaving the unemployment rate for that month unknown. In other words, policymakers and the public were flying partially blind during a pivotal stretch for the economy.
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Where Jobs Are—and Aren’t—Being Added
By November, job growth was relegated to just a few sectors.
Health care continued to carry the labor market, adding 46,000 jobs. Construction followed with 28,000 new roles, reflecting ongoing infrastructure projects and housing demand that hasn’t fully cooled.
But elsewhere, the picture was more sobering. Manufacturing offloaded 5,000 jobs in November after losing 9,000 the month prior, extending a year-long struggle tied to higher borrowing costs and softer consumer demand. Leisure and hospitality—once a standout in the recovery—cut 12,000 jobs last month, signaling that discretionary spending may finally be tightening.
The result is a job market increasingly dependent on a narrow band of industries, leaving many workers with fewer options if they’re laid off or looking to switch roles.
Why The Labor Market Is Slowing
Monthly job gains have fallen steadily since the start of the year, but the official numbers may still understate the softness ahead.
Federal Reserve Chair Jerome Powell has repeatedly cautioned that employment data is likely to be revised downward in early 2026, once the Labor Department incorporates more complete information.
“There are significant downside risks,” Powell warned recently, noting that job losses and slower hiring disproportionately affect people trying to re-enter the workforce or move into better-paying roles.
Two reasons could be behind this slowdown.
First, employers are just hiring less. Higher interest rates earlier in the year cooled business expansion, and many companies are prioritizing cost moderation over growth.
Second—and more quietly—labor force growth itself is slowing. Baby boomers are retiring at a rapid clip, shrinking the pool of available workers. At the same time, the Trump administration’s aggressive crackdown on both legal and illegal immigration has limited workforce growth, reducing the number of new workers entering the economy.
That dynamic means the economy doesn’t need to add as many jobs each month to keep unemployment steady—but it also means fewer opportunities for workers looking to move up, pivot, or recover from job loss.
Wages Are Still Rising—But More Slowly
There is one area where workers continue to see gains: paychecks.
According to the report, average wages rose 3.5% year over year in November, still outpacing inflation and giving many households modest gains in buying power. But even here, the trend is cooling. Wage growth has slowed steadily throughout 2025, easing pressure on employers—but also limiting how much financial breathing room workers feel.
Adding to the uncertainty, inflation data was also disrupted by the government shutdown. An overdue cost-of-living report for November is expected later this week, which will help clarify whether wage gains are truly keeping pace with prices.
The Bottom Line Heading Into 2026
The 2025 job market didn’t collapse, but it’s not on a steady foundation either.
The era of rapid hiring, widespread leverage for workers, and constant job hopping has given way to something more cautious and constrained. For workers, especially millennials and Gen Z, the message is sobering: job security is becoming more valuable again, and opportunities may take longer to materialize.
Cooling doesn’t mean crashing—but it does mean adjusting expectations. And after a year of delayed data, disrupted reporting, and mounting uncertainty, clarity may be the most valuable thing the labor market can offer next.