The unemployment rate in November was the highest since 2021, largely due to federal workforce cuts under the Trump administration.
Published December 31, 2025
The number of U.S. residents applying for unemployment benefits over the past week has fallen to the lowest level in a month, according to new figures from the Labor Department.
Wednesday’s weekly figures come at the end of a year marked by a weak labor market, a phenomenon that analysts partly blame on hiring hesitancy caused by President Donald Trump’s tariff policies.
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Experts also warned that last week’s data could be skewed by year-end holidays such as Christmas. This is because the weekly work week has become shorter and there are fewer opportunities to apply for unemployment insurance.
Wednesday’s numbers will be the last full week of unemployment statistics for 2025. Unemployment claims for the week ending December 27 fell by 16,000 to 199,000. This was an improvement from the previous week, recorded by the Labor Department. The number of unemployment insurance claims was 215,000.
The report also showed that the four-week average of unemployment claims, which smooths out some of the week-to-week fluctuations, rose by 1,750 to 218,750.
The U.S. unemployment rate peaked at 4.6% in November, the highest since 2021, when the country was facing the ravages of the coronavirus pandemic.
The increase is primarily due to many federal employees retiring following President Trump’s widespread cuts to the government workforce.
Unemployment claims are considered a proxy for layoffs and provide a real-time indicator of the health of a country’s job market.
weak labor market
Recent U.S. government statistics reveal a labor market that has lost employment momentum, even as other economic indicators such as gross domestic product (GDP) remain strong.
Since March, job creation has fallen to an average of 35,000 per month, compared with 71,000 in the previous 12 months.
Earlier this month, Federal Reserve Chairman Jerome Powell said the U.S. central bank had cut its benchmark lending rate by a quarter of a point due to concerns that the job market was weaker than it appeared.
This is the Fed’s third straight interest rate cut, and Powell said the latest jobs report could be revised downward by as much as 60,000 jobs.
The U.S. lost 105,000 jobs in October, mainly due to federal employee departures, but the U.S. economy regained 64,000 jobs in November, according to recent data.
Companies that have recently announced job cuts include shipping giant UPS, automaker General Motors, online retailer Amazon and telecommunications company Verizon.
