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Job growth has clearly slowed sharply in recent months, with the average for the four months ending in September being just 40,000 jobs a month, compared to 170,000 jobs in 2024. A major cause of the slowdown is the sharp curtailment of immigration, which began last June under Biden and has picked up speed with Trump. The underlying rate of labor force growth is now likely in the range of 30,000 to 60,000.

Since it’s not clear how many jobs are needed to keep even with the growth of the labor market, the focus should be more on the distribution of job growth and the unemployment rate from the household survey. In the last four months, the overwhelming majority of job growth has been in healthcare with most other sectors losing jobs. The ADP November report showed private sector job loss for the month, with manufacturing being especially hard hit.

It will also be important to look at the revisions to prior months’ growth. Revisions are autocorrelated. The fact that the prior two months revisions were downward means that it’s likely that the revisions reported in the November data will also be negative.

The unemployment rate has been inching up from 4.0 percent in January to 4.4 percent in September. While this is still a relatively low unemployment rate by historical standards, the direction of change is a cause for concern. Also, disadvantaged groups like Black workers and young people have seen much larger increases in unemployment.

Employment in the Goods Sector is Likely to Fall Again

The manufacturing sector has been shedding jobs for the last year and a half. The downward trend is likely to continue in November. In addition to the ADP report, it’s also worth noting that hours in manufacturing fell sharply in September, putting the index of aggregate hours more than a full percentage point below its year-ago level.

Construction employment has also stagnated in recent months. Residential construction has lost 30,000 jobs since the start of the year. This has been more than offset by gains in non-residential construction and infrastructure. Still, employment was flat between May and September.

Mining employment has also been trending downward. While the Trump administration has made a big point of opening more areas to leasing and reducing environmental obstacles to drilling, the low price of oil has made production in many areas unprofitable. The 14k year-over-year job loss in the sector is relatively inconsequential relative to the overall labor market; it is more than 2 percent of employment in the sector. It is likely to continue to shed jobs in November.

Health Care Employment Continues to Grow, Government Employment Likely to Stagnate

The health care sector will likely continue to add jobs in November, although at a slower pace than it did last year. Federal cutbacks will restrain job growth, but the sector will still add 20,000 jobs to 30,000 jobs. The federal government has been shedding jobs as a direct result of DOGE. These cuts mostly had been implemented as of October, but there may still be some further losses in November. State and local governments had been the second leading sector for job growth last year, but employment will likely be treading water the rest of this year and into 2026.

Restaurants had been the other major sector for job growth in 2025. After stagnating earlier this year, job growth has sped up, averaging more than 20,000 a month in the last three months.

Wage Growth is Weakening

Nominal wage growth had averaged slightly above 4.0 percent in 2023 and 2024. It seems to have slowed modestly in 2025. With inflation edging higher, real wage growth has slowed to a crawl. It is likely that the year-over-year growth in the hourly wage will slow further in November, with a rate under 3.5 percent.

The weakening of wage growth had been especially visible in the low-paying restaurant industry. Wages in this industry have bounced up some in September, but this could be reversed in the November data.

Unemployment Will Edge Higher

The weakness in the labor market will likely push the unemployment rate in November to at least 4.5 percent, and possibly higher. This rise in unemployment is hitting disadvantaged groups especially hard. The unemployment rate for both Black workers and young workers (ages 20 to 24) are likely to rise further from the current rates of 7.5 percent and 9.2 percent, respectively.

The Share of Unemployment Due to Quits

The portion of unemployment due to voluntary quits is likely to fall further. It has consistently been unusually low given the unemployment rate. This suggests that workers do not feel confident of their ability to get a new job if they leave their current job without a new job lined up. This view is supported by the September data from the JOLTS (Job Openings and Labor Turnover Survey), which showed the quit rate falling to 1.8 percent. The last time the quit rate was this low was in December of 2014, when the unemployment rate was 5.6 percent.

Unemployment for College Grads Could Rise Further

The unemployment rate for college grads rose to 2.8 percent in September. While the unemployment rate for college grads is still far lower than the rate for people with less education, they have been especially hard hit by the weakening of the labor market this year. The last time the unemployment rate for college grads was this high was in May of 2015. This is likely to be a special hardship for younger grads now that the pandemic moratorium on student debt repayment has ended and some of the Biden income-driven repayment plans have been cancelled.  

Weakening Labor Market, Bad Times for Workers

The labor market has gotten notably weaker over the last year. This is most visible in the low share of unemployment due to quits, as well as the extraordinarily low quit rate in the JOLTS data. Also, the sharp rise in the unemployment rate of Black workers and young people indicates they are having serious problems finding work. There had been some evidence wage growth had slowed, although the September report showed a somewhat better picture. At the moment, there is no basis for concerns about a recession, absent a collapse of the AI bubble, but the labor market is likely to show further deterioration in November.

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