The US labor market cools down as the unemployment rate rises to the highest level since 2021

2025-12-16 15:04:43

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The US labor market shows clear signs of cooling down in November as key employment indicators fell short of expectations. The unemployment rate rose to 4.6%, the highest since September 2021 and above the market forecast of 4.4%. This development indicates increasing labor market slack amid slowing economic growth and still-tight financial conditions.

Meanwhile, job growth remains modest. Seasonally adjusted non-farm payrolls increased by 64,000 in November, slightly higher than the expected 50,000 but significantly below the previous months’ average. This reflects growing caution among businesses due to high interest rates, prolonged inflation pressures, and weakening demand across many sectors.

Overall, the data suggests the US labor market is gradually rebalancing, which could influence the upcoming policy direction of the Federal Reserve (Fed).

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