- - Jobs reports to finally lift the fog on a fragile U.S. labor market

Steve KopackDecember 16, 2025 at 4:00 AM

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The Bureau of Labor Statistics will release a long-awaited trove of federal jobs data on Tuesday. (Al Drago / Bloomberg /Getty Images)

An answer is finally coming to a question that economists, consumers and even the chair of the Federal Reserve have been asking for months: What is happening with the nation’s labor market?

Emerging from the longest government shutdown in U.S. history, the Bureau of Labor Statistics will release a long-awaited trove of employment data Tuesday: October’s payrolls and November’s full jobs report are both set to be published at 8:30 a.m. ET.

After months in a data fog, economists broadly expect to see net job losses overall in October, followed by a slight rebound and gains in November.

Taken individually, these estimates seem to point in different directions, down in October and up in November. But viewed together, they are in line with the overall trajectory shown by alternative data sets in recent months: A labor market that is weakening, and an unemployment rate that is slowly creeping higher.

On the other hand, it's possible that the gloomy predictions are way off. If so, it would be neither the first time, nor the last, that the U.S. labor market has defied the experts.

October estimates

On Wall Street, estimates for October’s job numbers vary widely.

On the optimistic side, Goldman Sachs expects job growth of 10,000 roles.

But economists more broadly are expecting to see a contraction for the month that was consumed by the shutdown. Citigroup expects a loss of 45,000 while Deutsche Bank, Wells Fargo and Bank of America estimate a drop of 60,000 or more.

Already, this year saw two months of labor market contractions, in June and August, which hadn't happened since 2020.

Analysts expect October data to show a steep drop in the number of federal government employees. (Joe Raedle / Getty Images)

But if the bleakest of the estimates for October prove accurate, it could be the biggest one-month drop in payrolls since December 2020, at the height of the Covid-19 pandemic.

There are several reasons for the bearish sentiment.

“October marked the first month when workers who participated in the federal government’s deferred resignation program were no longer on the payroll,” wrote Wells Fargo economists in a note Monday about the program, which was carried out under the banner of Elon Musk’s now defunct Department of Government Efficiency.

“We expect federal employment to decline by roughly 125K in October — a monthly drop that would be bigger than the 97K year-to-date decline" overall in federal government payrolls, they wrote.

The government shutdown itself could also push down the numbers.

“Workers could have left out of frustration with unpaid furloughs or unpaid work, as back pay was only provided once the government re-opened,” JPMorgan recently warned.

Additionally, some economists believe that September’s jobs numbers could be revised downward on Tuesday. This would deal another blow to the overall picture of the U.S. economy in 2025.

Nationwide, a total of more than 2 million jobs were added last year, with 1.3 million of them coming between Jan. 1 and Oct. 1.

This year, total U.S. job creation from January through September was much lower, just 684,000 jobs — a little more than half of where it was at the same point the year before.

November expectations

Beyond October, many experts predict that a rebound likely occurred last month.

Economists polled by Dow Jones expect to see a gain of 50,000 jobs in November, but an unemployment rate of 4.5%, a tick higher than it currently is.

Hiring is widely expected to have picked back up in November, after an anticipated drop in October. (Joe Raedle / Getty Images)

But there are warning signs already floating around November's numbers, too.

“The data may be distorted,” Federal Reserve Chairman Jerome Powell said last week at a news conference in Washington.

During the 43-day shutdown, which ended on Nov. 12, the Bureau of Labor Statistics’ employees were unable to collect some key data.

As a result, there will be no unemployment rate or labor force participation rate released for October, and some demographic details for the month will remain unknown.

Powell said that while the employment data would be a welcome change after months without it, “we’re going to have to look at it carefully and with a somewhat skeptical eye.”

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