Unemployment Climbs to 4-Year High as Job Growth Dries Up

Two and a half months after the last pre-shutdown jobs report, the U.S. Bureau of Labor Statistics finally released its latest Employment Situation Summary on Tuesday, giving the public a highly anticipated update on the state of the U.S. labor market. As was widely expected, the data points towards a further cooling of the job market, as unemployment climbed to a four-year high in November and job growth all but dried up.

The unemployment rate climbed from 4.4 percent in September to 4.6 percent in November – there’s no data for October due to the shutdown – as 7.8 million people were unemployed, the highest level since August 2021, when the U.S. economy was still recovering from the Covid-19 shock. Add to that the nearly 5.5 million people who only work part-time for economic reasons, i.e. because they cannot find full-time work and you’ve got more than 13 million people currently working less than they’d like to.

And while labor supply is clearly there, demand has all but dried up. Over the past three months, U.S. employers added just 22,000 jobs per month on average, down from 380,000 monthly job additions in 2022, more than 200,000 in 2023 and 168,000 per month in 2024.

None of these numbers are catastrophic yet, but the trend is clearly negative as plenty of people are looking for work at a time when employers are cautiously looking for clues on where the economy is headed. At the moment, with uncertainty high and growth projections modest at best, many employers are more likely to cut jobs than to create new ones, which is why the Fed decided to cut rates for the third consecutive time this month, as it also eyes the labor market with growing concern.