As 2025 comes to a close, the latest U.S. jobs data paints a concerning picture for millions of American workers. Wage growth is decelerating sharply, job additions have slowed dramatically, and long-term unemployment is on the rise. These trends signal ongoing affordability challenges, particularly for lower- and middle-income households heading into the new year.
Key Highlights from the November 2025 Jobs Report
The Bureau of Labor Statistics (BLS) released delayed data on December 16, 2025, showing:
- Only **64,000 jobs** added in November, a fraction of the 261,000 monthly gains seen a year earlier.
- The unemployment rate rose to **4.6%** — the highest since September 2021.
- Average hourly earnings increased by just **0.1%** month-over-month to $36.86, with annual wage growth slipping to **3.5%** (down from 3.7% in September and 4.2% a year ago).
Wage growth peaked at nearly 6% in early 2022 during the post-pandemic rebound but has been trending downward amid cooling labor demand.
Rising Long-Term Unemployment: A Stubborn Problem
One of the most alarming signals is the growth in long-term unemployment. In November:
- **1.9 million people** had been job hunting for more than 27 weeks.
- This group now represents **about 24%** of all unemployed Americans — up from a post-pandemic low of 18% in early 2023.
Long-term joblessness erodes skills, discourages workers, and makes re-entry into the workforce even harder.
Why This Matters: The K-Shaped Economy Widens
Slower wage growth isn't just a statistic — it's squeezing consumer spending, which drives roughly 70% of U.S. GDP. Lower- and middle-income families, already hit hard by lingering inflation, rely heavily on wage increases to keep up.
Meanwhile, higher-income households have benefited from stock market gains and rising home equity, creating a **K-shaped recovery** where the affluent pull ahead while others fall behind.
As Goldman Sachs chief economist Jan Hatzius notes, nominal wages are now growing below the 4% rate considered sustainable alongside 2% inflation. This reduces inflationary pressure (a relief for the Federal Reserve) but hampers economic mobility and spending power.
Nationwide's Oren Klachkin warns that lower-income groups will face "ongoing affordability challenges into the new year," especially with limited savings and higher borrowing costs. LPL Financial's Jeffrey Roach adds that cooling wages make workers less likely to switch jobs — the quits rate has fallen to 1.8% from a 2022 peak of 3%.
A Glimmer of Hope?
Some factors may be temporary: Seasonal hiring of lower-wage workers can drag down averages, and economists like Mike Reid at RBC suggest growth could pick up in early 2026 with tax refunds and clearing policy uncertainty.
Longer-term, many expect the labor market to strengthen in the second half of 2026, potentially boosting hiring and wages modestly. But for the most vulnerable households — especially those carrying debt — relief may come slowly.
With job growth sluggish and wages barely keeping pace, 2026 could start on a shaky note for many Americans. Policymakers and the Fed will be watching closely as these trends unfold.