Statistics have always been open to interpretation, and people can draw very different conclusions from the same data. Still, it has become increasingly difficult to look at recent U.S. employment figures without concluding that the labor market is losing momentum. The unemployment rate has climbed to 4.6 percent—its highest level since September 2021—and other indicators suggest the slowdown may be deepening.
Economists point out that this concern persists even as overall economic growth appears relatively steady. The latest government report showed that employers added just 64,000 jobs in November, far below the 2024 monthly average of 186,000. That weak showing followed several months of sluggish hiring and came after payrolls actually shrank by 105,000 in October.
Much of the hesitation appears tied to uncertainty around government policy. Businesses remain cautious amid unresolved questions about import tariffs, immigration enforcement, and other potentially disruptive measures. Rather than expanding their workforces, many companies have opted to hold staffing levels steady. This approach has slowed job creation to a near standstill, but it has also helped prevent a wave of mass layoffs—keeping the labor market superficially stable.
That balance, however, may now be shifting.
The unemployment rate rose from 4.4 percent in September (the most recent prior data release) and is well above the 4.1 percent recorded a year ago. At the same time, wage growth has cooled. Average pay rose just 3.5 percent in November compared with a year earlier. With inflation still running close to 3 percent for much of 2025, many households are seeing little real improvement in purchasing power.
A stagnant job market helps explain why wages are under pressure. Hiring has slowed dramatically, quit rates have fallen to a five-year low, and employers face little incentive to raise pay to attract or retain workers. As a result, the share of Americans working multiple jobs has climbed to its highest level in nearly 25 years—a clear sign of financial strain.
Laura Ullrich, director of economic research for North America at Indeed’s Hiring Lab, says these labor-market weaknesses now outweigh the benefits of modest economic growth, which some forecasts place at around 2 percent for 2025.
“It paints a sobering picture of a job market that may officially be turning frigid after a prolonged cooling period,” Ullrich wrote in her analysis of recent employment data.
Another troubling pattern is the concentration of job growth in just a few sectors. Healthcare, leisure and hospitality, and construction account for most of the hiring gains, while industries such as manufacturing, technology, and transportation have largely frozen hiring or reduced headcounts. If even the currently resilient sectors pull back, unemployment could rise quickly.
There is also reason to believe the official data may be overstating job growth. Federal Reserve Chair Jerome Powell recently acknowledged that existing data-collection methods could exaggerate hiring levels. Federal agencies plan to introduce more accurate measurement tools next year, but those improvements may come with an unwelcome side effect: downward revisions to already-weak employment numbers.
Ullrich cautions that the true picture of the labor market may not be clear until those revisions are complete. In the most optimistic scenario, job growth continues slowly and unevenly, concentrated in a handful of sectors. In a more pessimistic one, employment losses over the past year could be larger than currently reported.
Until clearer data emerge, the message from the labor market is increasingly hard to ignore: beneath the surface, conditions may be weaker—and more fragile—than the headline numbers suggest.