As we sit here in mid-December 2025, the “soft landing” narrative that dominated headlines for the last two years feels significantly bumpier than advertised. The release of the November jobs report—delayed and distorted by the recent government shutdown—dropped a reality check on the US economy: 4.6% unemployment.
This is the highest level we’ve seen since late 2021. With only weeks left in the year, the big question isn’t just where we end 2025, but whether this upward trend is a blip or a break in the dam.
The “Shutdown” Distortion & The Real Trend
We spent October flying blind due to the federal data collection freeze, which makes the November numbers even more jarring.
The jump to 4.6% (up from 4.3% in August) wasn’t just a statistical noise event. The underlying data shows a cooling engine:
- Hiring Freeze: Employers added only 64,000 jobs in November.
- Revisions: August and September numbers were revised downward, revealing that the labor market was weaker than we thought before the shutdown drama.
- Sector Rot: While healthcare and construction are holding up, we are seeing real contraction in transportation, warehousing, and federal employment.
The Policy Headwinds: Tariffs and Immigration
We cannot ignore the elephant in the room: the policy shifts of the second Trump administration. The search results and economic reports highlight two major levers pulling on the labor market right now:
- Tariffs: Businesses are clearly pausing hiring to assess the cost impact of new trade barriers. The “wait-and-see” approach is freezing capital expenditure and headcount.
- Immigration Crackdowns: Industries reliant on immigrant labor (agriculture, hospitality) are facing supply shocks, but paradoxically, this hasn’t lowered the unemployment rate yet—likely because the broader cooling in demand is outpacing the contraction in labor supply.
The Speculation: Where do we hit the finish line?
So, what will the final number be for 2025?
The December jobs report won’t be released until January 9, 2026, but we can make an educated speculation based on the high-frequency data we have now.
My Prediction: 4.6% – 4.7%
I believe the unemployment rate will likely hold at 4.6% or tick up slightly to 4.7% to close out the year. Here is why:
- Seasonal Lulls: December hiring is usually robust in retail, but with consumer confidence shaky and inflation stickier than hoped, seasonal hiring has been muted.
- The Lag Effect: The Fed’s recent rate cuts (referenced in the Dec 10 meeting) take months to work through the system. They won’t save the December jobs numbers.
- Momentum: The trend line is undeniably upward. When unemployment rises 0.5% from its cycle low (which was down near 3.4%), it rarely stops immediately. We have breached that “Sahm Rule” threshold.
The Bottom Line
2025 is ending on a note of caution. We aren’t in a freefall, but the labor market has lost its ironclad resilience. The “employee’s market” of 2022-2023 is officially dead; 2026 will be about protecting the gains we have left.