The U.S. labor market has slowed: forecasters expect about 40,000 jobs were added in November and the unemployment rate to remain near 4.4%. A government shutdown delayed key reports, complicating Fed deliberations. Large revisions have sharply reduced previously reported job gains, and analysts say federal buyouts and separations may weigh on October and early‑2026 payrolls.
U.S. Employers Likely Added Just 40,000 Jobs in November as Shutdown-Delayed Reports Cloud Labor Outlook
FILE - In this May 7, 2020, file photo, the entrance to the Labor Department is seen near the Capitol in Washington. (AP Photo/J. Scott Applewhite, File)
WASHINGTON — The U.S. labor market has cooled this autumn as many employers hold onto existing staff but hesitate to add new hires amid policy and technological uncertainty.
Official economic reports were disrupted by a 43-day government shutdown, leaving policymakers and markets with delayed and incomplete data. The Labor Department is expected to publish November’s employment and unemployment figures on Tuesday — 11 days later than scheduled — providing the first timely read after the backlog.
Modest Hiring Expected
Economists polled by FactSet forecast a modest gain of about 40,000 jobs for November and expect the unemployment rate to hold near 4.4%, the last published reading for September. Hiring momentum has clearly slowed from the post-pandemic boom, when monthly gains averaged roughly 400,000.
Revisions and the Bigger Picture
Recent Labor Department revisions painted a weaker picture of job growth earlier in the year: revisions for September showed the economy created roughly 911,000 fewer jobs than initially reported for the year ending in March. That revision reduced the average monthly gain over that period to about 71,000 jobs from the previously reported 147,000. Since March, average monthly job creation has dipped further to roughly 59,000.
“It’s a labor market that seems to have significant downside risks,” Fed Chair Jerome Powell said after a recent policy decision, noting that revisions could cut reported payroll gains substantially.
What’s Driving the Pause?
Employers cite several reasons for the slowdown: uncertainty over trade and tariff policies, lingering effects of higher interest rates used to fight inflation in 2022–2023, and growing consideration of automation and artificial intelligence that can change workforce needs.
“Many businesses are in a holding pattern: ‘Are we going to hire or not? What can we automate? What requires a human touch?’” said Matt Hobbie, vice president of staffing firm HealthSkil in Allentown, Pennsylvania. He noted cooling in logistics and transportation as automation and robotics begin to reshape hiring in those sectors.
Fed Response and Division
Concerns about labor-market weakness helped prompt the Federal Reserve to cut its benchmark interest rate by a quarter percentage point last week — the third reduction this year — but the decision was not unanimous. Several officials dissented, reflecting debate inside the Fed about whether to cut further while inflation remains above the 2% target.
Data Gaps From The Shutdown
The shutdown delayed the Labor Department’s release schedule. The September jobs report was finally published on Nov. 20, seven weeks late. The department plans to publish selected October payroll figures alongside November’s report, but it will not release an October unemployment rate because the household survey data needed to calculate it were not collected during the shutdown.
Analysts have also flagged large federal buyouts and end-of-fiscal-year separations as a likely drag on October government payrolls. Research firm Evercore ISI estimated that roughly 150,000 federal employees accepted buyouts, with about 100,000 potentially leaving at the end of the 2025 fiscal year on Sept. 30 and the remainder departing later; those separations could show up across October and early-2026 reports.
Bottom Line
Tuesday’s delayed data should offer clearer near-term signals on hiring and unemployment, but economists warn that recent revisions and continued policy and technological uncertainty mean the labor-market picture remains fragile.
