Unemployment Rises to Highest Level Since 2021

Unemployment Rises to Highest Level Since 2021

The U.S. labor market showed signs of strain in October and November, as the unemployment rate climbed to its highest level in four years.

Following a downward revision to September’s employment figures, the U.S. Bureau of Labor Statistics reported a loss of more than 100,000 jobs in October, driven largely by a sharp decline in federal government employment. November offered a partial rebound, with nonfarm payrolls increasing by 64,000 jobs. Healthcare accounted for 46,000 of those gains, while construction added 28,000 positions. However, November’s growth was not sufficient to offset the losses recorded in October.

“Taken together, the October–November jobs data don’t change our view that the labor market is steady enough for the Federal Reserve to keep policy on hold until mid-2026,” said Nancy Vanden Houten, lead U.S. economist at Oxford Economics. She noted that despite October’s decline, payrolls expanded by an average of 75,000 jobs over the past three months—levels she described as “healthy,” though she cautioned that the figures could still be revised lower.

The number of unemployed Americans rose to 7.8 million in November, pushing the unemployment rate to 4.6%. That compares with 4.4% in September and 4.2% a year earlier.

Vanden Houten attributed part of the increase to the recent government shutdown. “We think the shutdown may have contributed,” she said, adding that the number of permanent job losers declined after previously trending higher. Growth in the labor force also played a role in the rising unemployment rate.