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People have long found ways to draw different conclusions from the same set of statistics — diverging interpretations that are even more common in these divided times. But it’s becoming increasingly difficult to read recent employment data without inferring that they reflect an apparently stalling labor market that has sent the the unemployment rate to 4.6 percent — the highest since September 2021.
Economists say that fear is based on indications that despite signs of expanding economic growth, the weakening employment outlook is getting worse. Those concerns rose this week when the latest government data showed employers added only 64,000 new jobs in November. That was less than a third of the average 186,000 monthly hiring rate in 2024, and followed anemic recruitment activity since May. It also came on the heels of a 105,000 headcount decline in October.
Those numbers reflected businesses remaining wary of uncertainties stemming from import tariffs, mass deportations, and other disruptive government policies. As those doubts about the economy’s health spread, companies adopted the cautious practice of maintaining, rather than expanding staff levels. Indeed, while those no-hiring strategies slowed job creation rates to almost zero, employers’ refusal to undertake mass firings has also helped keep the employment situation stable in recent months.
But that now may be changing.
November’s 4.6 percent unemployment rate was an increase from 4.4 percent in September — the last time official figures were published — and considerably higher than 4.1 percent a year ago. It also marks the highest jobless level in more than four years. And even as that key metric has risen, other factors have also started troubling economists.
For starters, wage growth advanced by only 3.5 percent in November compared to the same month last year. While the latest official figures showed inflation slowed to 2.7 percent in November, the average monthly rate has hovered around 3 percent in 2025. That has meant households already facing an affordability crisis have seen prices increase almost at pace with their incomes. That situation doesn’t look likely to change soon.
The reason for that goes back to the weak job numbers. With company hiring virtually stalled, and employee quit rates at a five-year low, business aren’t under pressure to increase pay levels to attract or retain workers. And with wage levels flattening, the number of people who’ve have taken on second or third jobs just to get by has risen to its highest level in nearly 25 years.
According to Laura Ullrich, director of economic research in North America for job posting site Indeed’s Hiring Lab research unit, those negative employment statistics are now outweighing broader economic growth that some experts think may reach about 2 percent for 2025.
“(I)t still paints a sobering picture of a job market that may officially be turning frigid after a prolonged cooling period,” wrote Ullrich in an analysis of the October and November employment numbers.
Moreover, Ullrich noted that as has been the case for the past half year, specific sectors — especially healthcare, leisure and hospitality, and construction businesses — have been responsible for most new jobs created. By contrast, the majority of other industries — notably manufacturing, tech, and transportation — have held headcounts stable, or cut them.
Should those few actively hiring sectors join the others in halting large-scale recruitment, the overall jobs picture and unemployment rate risk swiftly turning bleaker. Yet even businesses reporting higher recruitment may not be doing that at the paces statistics indicate.
As Federal Reserve chairman Jerome Powell noted earlier this month, current methods for gathering government employment data may generate “overstatement in these numbers.” That means companies that now appear to hiring be actively may be doing so at lower levels than official numbers suggest — meaning the labor market may be sputtering even more than some economists fear.
Federal agencies are planning to swap those data collection practices for more accurate alternatives early next year, which should provide increasingly accurate job readings. But Ullrich warns that switch to more precise tools could result in today’s feeble employment numbers being revised even further downward to reflect the true state of the labor market.
“Until we observe the new methodology and updated payroll estimates, we should remain guarded in our interpretation of these data,” Ullrich wrote of the recent job numbers. “In a best-case world, the labor market continues its languid growth, with a small set of sectors generating a very large percentage of jobs. However, it is also possible that we have lost jobs in many of the months this year, and future revisions will present an even bleaker view. “
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Bruce Crumley
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