Investing Insights

JOBS WATCH  •  November 12, 2025  •  Jon Wolfenbarger

Weak Employment Data Is Piling Up

CHICAGO, IL — With the government out of business for now (except for still collecting taxes and printing money, of course), we have to rely on the private sector for clues about the labor market.

Unfortunately, the latest data is not good. Let’s take a look.

Private Jobs Data Sources

One of the best private jobs data sources is ADP. ADP reported that private payrolls rose 42K in October, above the consensus estimate of 30K. September was revised up from -32K to -29K. The 3-month moving average is now 3K, which is awfully close to 0, as this chart shows. 

ADP also said small businesses cut -10K jobs, which is the 5th decline in the past 6 months. The 3-month average of small business job losses fell to -29K, which is the highest rate of job losses since the covid panic in 2020, as this chart shows.

Another source is LinkUp. They use a dataset of real-time job postings from company websites. They estimate -5K jobs were lost in October, well below the +80K they estimated in September. This is only the second negative monthly report since January 2021.

Revelio estimates jobs fell by -9K in October, the second largest drop in five years. Also, September was revised down from 60K to 33K, with total negative revisions for June through September of -142.5K.

According to Challenger, Gray & Christmas, this October had the most job cuts of any October in 22 years. As Challenger said, ”this comes as AI adoption, softening consumer and corporate spending, and rising costs drive belt-tightening and hiring freezes.” This chart shows the annualized run-rate of job cuts for 2025 (assuming November/December are the YTD average) are the highest since the Global Financial Crisis of 2008-2009 (excluding covid layoffs).

Source: Mac10 on X

Even The Chicago Fed Has Bearish Data

The Chicago Fed estimates layoffs have continued to rise ever since the Fed started raising rates, as this shows.

Similarly, they estimate the hiring rate has also continued to fall since early 2022.

Importantly, they estimate the US unemployment rate increased to 4.36% in October, the highest in four years, as shown here. The unemployment rate has now increased a full 1% since May 2023. Every time it has increased at least 0.5%, there has been a recession.

Leading Indicators Are Bearish

The NFIB percentage of small businesses that say poor sales are their most important problem has risen to over 10%. Since small businesses employ 46% of Americans, this is a leading indicator for the unemployment rate. This suggests unemployment will continue to rise.

The long-term unemployment rate is at its highest level since 2016, as this shows.

The rise of AI is creating a difficult job market for young people. The unemployment rate for 20-24 years old is 9.2%, the highest since 2016 (ex covid).

Investment Implications

A recession should have occurred by now after the aggressive Fed rate hikes of recent years. Immigration, the AI bubble and fixed interest rate debt may have postponed it, but this employment data suggests it may come after all. This would not be good for stocks, which are at all time high valuations. We will see what happens next.

In the meantime, here are some excellent words of wisdom about what is really important from Warren Buffett’s last letter to shareholders:

A Few Final Thoughts

• One perhaps self-serving observation. I’m happy to say I feel better about the second half of my life than the first. My advice: Don’t beat yourself up over past mistakes – learn at least a little from them and move on. It is never too late to improve. Get the right heroes and copy them. You can start with Tom Murphy; he was the best.
• Remember Alfred Nobel, later of Nobel Prize fame, who – reportedly – read his own obituary that was mistakenly printed when his brother died and a newspaper got mixed up. He was horrified at what he read and realized he should change his behavior.
• Don’t count on a newsroom mix-up: Decide what you would like your obituary to say and live the life to deserve it.
• Greatness does not come about through accumulating great amounts of money, great amounts of publicity or great power in government. When you help someone in any of thousands of ways, you help the world. Kindness is costless but also priceless. Whether you are religious or not, it’s hard to beat The Golden Rule as a guide to behavior.
• I write this as one who has been thoughtless countless times and made many mistakes but also became very lucky in learning from some wonderful friends how to behave better (still a long way from perfect, however). Keep in mind that the cleaning lady is as much a human being as the Chairman.
• I wish all who read this a very happy Thanksgiving. Yes, even the jerks; it’s never too late to change. Remember to thank America for maximizing your opportunities. But it is – inevitably – capricious and sometimes venal in distributing its rewards.
• Choose your heroes very carefully and then emulate them. You will never be perfect, but you can always be better.