Since January, the US federal government has lost 271,000 jobs, with more than half of those losses registered in October. Photo / 123rf
America’s economy is flashing new warning signs, as the United States labour market shed jobs over October and November, and the unemployment rate ticked up to 4.6%, the highest level since 2021.
Job gains of 64,000 in November exceeded expectations but only partially offset the loss of 105,000 jobs in October.
Those losses, the sharpest since the Covid pandemic-era recession, reflected the exit of tens of thousands of federal workers who took a deferred resignation package earlier this year.
The long-awaited jobs report by the Labour Department was delayed because of the US Government shutdown, creating headaches for economists and policymakers trying to assess how fast the labour market slowed in the northern autumn, as US President Donald Trump’s economic policies, including higher tariffs and immigration enforcement, continue to take hold.
Wage growth cooled significantly in November, reflecting new strain on US households as inflation remains elevated. Average hourly wages have risen by 3.5% over the past 12 months, to US$36.86 ($63.72) an hour.
Also, job creation in August was revised down by 22,000, showing the economy shed 26,000 jobs that month. September job gains were also revised lower by 11,000 to 108,000.
“Today’s report showed overall stagnant growth,” said Nicole Bachaud, labour economist at ZipRecruiter.
“This really points to the challenges in the policy landscape that businesses are going up against, tariffs, geopolitical uncertainty, inflation that’s staying really stubborn.”
The unemployment rate has risen this year, from 4% in January to 4.6% in November, as more Americans, some of whom are re-entering the labour market, struggle to find opportunities.
The unemployment rate rose sharply for African Americans and teenagers. Rising unemployment for those groups often serves as a bellwether for a broader economic downturn.
“The fact that the unemployment rate has gone up [so much] adds to the realisation of what we’re seeing in consumer attitudes that even as the economy grows, most Americans don’t feel very good about it,” said Diane Swonk, chief economist with the tax and accounting firm KPMG.
The report does not contain the unemployment rate for October because the Government could not collect survey data during the shutdown, a first for the agency since the survey began in 1948.
The Trump Administration highlighted the bright spots in the jobs report. “THE BEST IS YET TO COME!” the White House posted on social media, highlighting growth in the private sector, the shrinking of the federal government and jobs going to “Americans, not illegals”.
Some economists have noted that there is little evidence that US-born workers are picking up jobs abandoned by immigrants who have left the country.
Healthcare continued to lead jobs gains in November, adding 46,000 positions. Construction grew by 28,000 jobs and social assistance added 18,000 positions. But transportation and warehousing and federal government payrolls lost jobs in November.
Since January, the federal government has lost 271,000 jobs, with more than half of those losses registered in October.
The manufacturing sector also shrank in November under the weight of tariffs and has lost jobs most months this year, even as the Trump Administration argues that its trade war will revive American manufacturing.
Leisure and hospitality, which has helped buoy the labour market this year, shed positions, as consumers have pulled back on discretionary spending.
The labour market has been softening since June, with hiring sputtering to near the lowest level in more than a decade and the unemployment rate rising.
Headwinds including tariffs, inflation and cautious consumer spending have prompted employers to suspend hiring.
Some white-collar employers have laid off employees or announced cuts this autumn, especially amid the growth of artificial intelligence, which employers can use to replace jobs.
Still, filings for unemployment insurance, the closest to a real-time gauge for layoffs in the broader economy, remain low, although they ticked up last Thursday.
“Businesses need certainty when they go and make their hiring decisions and their investment plans, and when there’s uncertainty in the economy, it just makes things harder,” said Sam Kuhn, an economist with the recruitment software company Appcast.
So few people are entering the labour market, in part because of the Trump Administration’s immigration enforcement, that the economy no longer needs to pump out hundreds of thousands of jobs a month to keep the unemployment rate steady. Economists say it’s possible that creating around 50,000 jobs a month could keep the unemployment rate stable.
“The unemployment rate would be much higher right now without the absence of immigrants that we’re seeing and the loss of participation of older workers retiring,” said Swonk, the KPMG economist.
In another sign of labour market fragility, the number of Americans working part-time who would prefer fulltime work surged by more than 900,000 from September to November.
And the number of Americans who have been unemployed for less than five weeks jumped to 2.5 million in November, the highest level since 2020.
“If you’re a worker that just freshly got laid off or are looking for new work, there’s not a lot of companies hiring right now,” Kuhn said.
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