US Unemployment Rate in 2025 Hits Highest Level in Four Years

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The US unemployment rate rose to 4.6% in November 2025, reaching its highest level in four years. That means roughly 7.8 million Americans are actively searching for work but can’t find it.

US Unemployment is On the Rise in 2025

November’s employment data came with an unusual complication. Due to the government shutdown, lasting from October 1 through November 12, the unemployment rate was released for October because statistical agencies couldn’t collect the necessary information.

But finally, November’s numbers are finally here. The economy added just 64,000 jobs in November.  But the national unemployment rate rose to 4.6% in November 2025. The market expectations were for it to stay at 4.4% or 4.5%.

The US started with a 4% unemployment rate in January, and it was stable at 4.2% for most of the first half of the year. However, it has been rising by 0.1% every month since July and is now up by 60 basis points from the beginning of the year.

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You can see on the chart how there has been a steady increase in the unemployment rate over the last 5 months. If you look at the longer-term trend, we clearly have a weakening labor market.

The numbers don’t lie, and they’re starting to tell a concerning story. 

The last time employment was above 4.5% was in October of 2021. That marked the highest monthly unemployment level in the period that followed the peak of 2020, and since then, the rate generally stayed below 4.5 % until it began rising again in 2025. 

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Keeping the 2020 disruptions aside, the unemployment rate has climbed to its highest point in more than 8 years.

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Also, when including individuals working part-time to make ends meet, the unemployment rate rises to 8.7%, the highest since August 2021.

Not every industry is experiencing the same pain. Some sectors continue to show resilience while others are struggling to stay afloat.

Healthcare remains the strongest in the job market, adding 46,000 positions in November. Construction surprised economists by adding 28,000 jobs, driven largely by specialized trade contractors.

On the other hand, Federal government employment cratered, losing 271,000 jobs since January due to the Trump administration’s DOGE cutbacks. The concern is that if these laid-off federal workers cannot find new employment in the coming months, it will become problematic.

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Among major worker groups, teenagers saw the highest unemployment rate in November at 16.3%, highlighting how younger workers are often the first to feel shifts in the job market. 

In contrast, unemployment rates for adult men and adult women both stood at 4.1%, showing stability among core working-age groups. 

Why has the U.S. unemployment rate been rising in 2025?

Here are the key factors driving the rise in unemployment:

1. Weak job growth: While the economy did add jobs in some months of 2025, overall monthly job gains had slowed compared with previous years.
2. Federal Layoffs: A large reduction in federal government jobs (including voluntary departures and layoffs) removed a substantial number of positions from the economy, which has also weighed on the overall unemployment rate.
3. Economic uncertainty: Economic uncertainty has made employers more cautious about expanding their workforce. This dynamic reduces hiring.

Unemployment is a key measure of economic health. When it stays low, most people who want a job can find one. When it rises, it suggests that hiring is slowing and that more people are struggling to find work.

Bottom Line

The American job market in 2025 is showing real signs of strain. An unemployment rate of 4.6% isn’t a disaster, but the direction matters more than the destination.

The biggest concern is also massive job cuts. Layoffs in the United States reached their highest level in 5 years, with 946,426 job cuts announced through September.

However, rising unemployment does not automatically mean the economy is in a recession, but it does signal a cooling labor market.