US Unemployment Hits 4.6%: 7.8M Americans Jobless in 4-Year High

US unemployment jumped to 4.6% in November. Nearly eight million Americans are seeking work they can't find — the worst stretch since late 2021. Federal job cuts and a crisis in part-time employment are driving the figures higher.

Since the start of the year, the federal government has shed 271,000 jobs, with Trump-era buyout programmes alone accounting for more than 160,000 workers leaving payrolls in October. Meanwhile, 909,000 additional Americans have found themselves stuck in part-time roles since September.

A six-week government shutdown paused data collection, creating the first gap in unemployment records since 1948. The ongoing cuts and the surge in involuntary part-time work are deepening the labour market's struggles.

Federal Cuts Drive Job Losses as Part-time Work Surges

Federal employment has decreased by 271,000 since hitting its peak in January. October was particularly stark, with 162,000 workers accepting buyouts. But the real concern lies beneath these headline figures. An estimated 5.5 million Americans are now working part-time involuntarily — an increase of 909,000 since September — because they are unable to secure full-time employment.

These workers want 40 hours a week; instead, they are often working around 20 hours. The so-called 'real' unemployment rate — which includes those in part-time roles who want full-time work or have become discouraged — reached 8.7% in November, according to the New York Times. That is a one percentage point increase since November 2024.

Health Care Adds Jobs While Manufacturing Continues to Suffer

The employment landscape varies considerably across sectors. Health care added 46,000 jobs in November, maintaining an average of 39,000 new roles per month over the past year. The construction sector also gained 28,000 jobs, driven by increased activity among commercial builders.

By contrast, manufacturing shed 5,000 jobs in November — marking the seventh consecutive month of decline, despite promises from Trump's administration to bolster tariffs. The transportation and warehousing sector lost 78,000 jobs since February, reflecting a slowdown in e-commerce logistics.

Retail, hospitality, and professional services sectors saw little change, suggesting the labour market is neither booming nor collapsing but rather stagnating.

Black Workers Hit Hardest as Unemployment Reaches 8.3%

The economic toll is uneven across different communities. Black unemployment stood at 8.3% in November, more than double the white unemployment rate of 3.9%. This disparity has widened since the start of the year.

The New York Times reported that Black unemployment has increased by over two percentage points since January, with economists citing it as an early warning sign of broader labour market stress. When Black workers lose jobs, the ripple effects often lead to wider economic repercussions across the entire market.

Young people are also feeling the impact. The unemployment rate among teenagers has risen to 16.3% — a significant increase since September — effectively blocking many young people from entering the workforce at entry-level positions.

Federal Reserve Under Pressure as Labour Market Weakens into 2026

These warning signs have prompted the Federal Reserve to respond more cautiously. The central bank recently cut interest rates, a move reinforced by unemployment figures that have already exceeded the Fed's own forecasts.

Officials had projected unemployment would peak at 4.5% this year. However, the November figure of 4.6% has already surpassed that forecast. Wage growth remains modest at 3.5% annually — the slowest pace since 2021, according to the New York Times.

The upcoming jobs report, scheduled for 9 January, will be crucial in determining whether December's holiday hiring season stabilised the market or if the decline will continue. If unemployment continues to rise, pressure will intensify on the Fed to implement more aggressive rate cuts early in 2026.