Econified

The Bureau of Labor Statistics (BLS) releases monthly reports on the labor market. However, with the government shutdown in October and early November, the BLS was unable to release October’s jobs numbers in November. Therefore, the most recent data is from September 2025. This morning, the BLS released the November 2025 employment report, and this is allows stakeholders in the U.S. Economy a better look at how the labor market is performing. This is incredibly important because labor is a key component to domestic output, so underutilization of labor is an indicator of an underperforming economy. Sustained high unemployment or rapidly rising unemployment rates will cause a recession due to decreased economic output.

Since September, the unemployment rate grew by 0.2% up to a total of 4.6% total unemployment. However, an additional 64,000 jobs were added to the economy. Increasing jobs and increasing unemployment signals that there were more new entrants to the job market than there were positions filled. This is can be troubling news because it continues the trend that was discussed in the September Jobs Market recap. The September job market recap goes into more depth in individual sector’s trends and implications of the slowly growing unemployment rate. If unemployment rates keep slowly worsening, this will put the economy in a tough spot in coming months. The unemployment rate has increased by 0.1% every month since June 2025. This trend towards higher unemployment has only really been occurring in the last 6 months. Past that, the unemployment rate is about 0.4% higher than it was a year ago. This represents roughly 700,000 more unemployed now than a year ago.

Historically a 4.6% unemployment rate is not a major concern. Unemployment rates have consistently hovered above 4% for the last 20 years. There were only a few years when the unemployment rate fell below the 4% mark for any month. The Federal Reserve’s rate cut decision on the 10th will also help to stop the growing unemployment rate in the economy. The news released today was fairly mild without any huge concerns. While most major indexes did trade lower today due to the slow rise in unemployment, the impact was minimal. Inflation data on Thursday will give another key indicator into the health of the economy.

The general public seems to have a much more negative view of the labor market than this job market data suggests. This could be due to discouraged workers who are not included in the labor market because they are not actively seeking employment. It may also be the case that frictional unemployment is down right now, so most of the unemployment is structural. Structural unemployment is more impactful to the people’s perceptions of the labor market because it lasts longer. It is very disheartening for workers who cannot find work due to lacking relevant skills. Understanding the types of unemployment and the reason for unemployment is very important to understanding the economy. A simple guide can be found here.

Ultimately, this labor market report showed continued trends in a slowly worsening labor market. A 4.6% unemployment rate is not uncommon, but worsening unemployment numbers are always a reason for some concern. At the current rate, the U.S. economy should reach 5% unemployment around March 2026. This is unlikely to happen as increasing unemployment rates will influence the Federal Reserve to continue lowering interest rates. Decreasing interest rates speeds up growth and combats unemployment. There is no real reason for concern in the labor market at this time, but it is worth monitoring in the months to come to see if economic conditions worsen.