Breitbart Business Digest: This Is What Reprivatizing the Government Looks Like

Government Employment Fell Sharply

How to Read Tuesday’s Confusing Jobs Report

Tuesday’s chaotic employment report had something for everyone from hawks to doves, bulls to bears.

The November employment report was issued a week and a half later than usual, on the third Tuesday rather than the first Friday, after being delayed by the government shutdown. It included the standard monthly data from the establishment and household surveys for last month and the establishment survey data for October. We are never going to get the household survey—which includes the unemployment and labor force participation rates–for October because the government was closed when it would normally be collecting responses.

Let’s start with the household survey. The unemployment kicked-up to 4.6 percent after rounding, which initially sent bond yields lower and stocks higher as it appeared to make rate cuts more likely in the first quarter of next week. But before rounding, this increase was smaller than it seemed: from 4.44 percent in September to 4.56 November. That’s around a 0.06 point increase per month, which is a slow enough pace to suggest a healthy labor market and about one-third the pace needed to trigger recession signals.

Importantly, the 4.56 percent unemployment rate is close to the media forecast of 4.5 percent from Fed officials in last week’s summary of economic projections. If unemployment is broadly stable in the December report, which is due out in January, the Fed is likely to feel comfortable staying on hold at its end-of-January meeting.

As well, the increase was driven for the “good” reasons of a rise in both the population and workforce participation. The adult civilian population grew by a 0.9 percent annualized rate over the two months while the workforce grew at an even faster 1.13 percent annualized. The labor force participation rate climbed to 62.5 percent, suggesting that more Americans are being drawn into work by better conditions and higher wages.

Adult unemployment held steady. For men over 20, unemployment climbed from 4.0 to 4.1 from September to November. For adult women, the unemployment rate fell from 4.2 to 4.1 percent. Among workers 25 and over, the unemployment rate remains a very low 3.7 percent, up from 3.5 percent in September. This suggests stability for most workers.

The other “good” reason for the rise of unemployment is the decline of government employment, evidence of progress for the Trump administration’s program of “reprivatizing” the U.S. economy. The number of workers reporting they were in government jobs fell from 22.554 million in September to 22.051 million in November, a decline of over 500,000. Meanwhile, the number of private sector workers in the household survey climbed by 206,000, equivalent to a one percent growth rate, slightly faster than the population growth rate.

President Donald Trump speaks to reporters in the Oval Office of the White House on December 15, 2025, in Washington, DC. (Anna Moneymaker/Getty Images)

The establishment survey showed payrolls growing even faster than expected in November. Economists had forecast a 45,000 job increase, significantly below the 64,000 reported Tuesday. In October, the economy shed 105,000 jobs (largely due to the contraction in federal payrolls). The three month moving average for jobs is now around 22,000, significantly below most estimates of the job growth necessary to keep the unemployment rate from rising.

But that October contraction is a bit misleading. It was driven by the large cut in employment at the federal government, where workers who took early resignation packages earlier this year finally were taken off payrolls. Federal government employment shrank by 157,000 in October and another 6,000 in November. Since peaking in January under Joe Biden, federal employment is down by 271,000. Federal payrolls have now contracted to their smallest since December 2014.

Strip Out Healthcare, and the Private Sector Is Shedding Jobs

Private sector hiring, on the other hand, was much stronger than anticipated, growing by 69,000 jobs compared with the forecast of 30,000. Since the last time we had a jobs report—the September report—private sector employment is up 120,000, an average monthly gain of 60,500. The three-month moving average is now 75,000, up from a paltry 13,000 in August.

On the other hand, much of that growth was driven by the so-called government adjacent sectors of healthcare and social assistance, where government funding tend to drive employment rather than underlying economic demand. Employment contracted in manufacturing, transportation and warehousing, information technology, and the weathervane of temporary services. Leisure and hospitality, a discretionary sector, saw payrolls drop by 12,000.

Excluding healthcare and social assistance, the private sector shed 7,600 jobs from September to November, an annualized rate of contraction of 0.41 percent. That suggests that the Fed’s decision to pivot to cutting rates in September was prudent.

So, the jobs report was both better and worse than it looked on the surface. Better because the rise in unemployment was driven by shrinking government payrolls and rising workforce participation. Worse because the private sector’s growth was overwhelmingly in the non-cyclical government-adjacent parts of the economy.

If this was the last report before the Fed’s next meeting, it would likely argue for another rate cut. But the Fed will have one more month in hand before it meets; and given all the noise in this report, the next is likely to determine the direction of policy.