Federal Workforce Shrinks By 162,000 As Unemployment Spikes To Four-Year High

Delayed reports reveal that while the U.S. economy picked up 64,000 jobs in November, it saw a decline of 105,000 in October following the Trump administration’s cutbacks to federal staff.

A drop of 162,000 federal employees fueled October’s overall job losses, with many resigning on September 30 under mounting pressure from Elon Musk’s Department of Government Efficiency (DOGE) project to reduce the federal payroll. The Deferred Resignation Program (DRP), informally known as the “Fork in the Road” and part of the DOGE initiative, gave federal employees the option to resign early with continued pay and benefits through the end of September if they accepted the offer by a set deadline.

Historically, six-figure drops in federal employment have occurred during wartime and in the years following a decennial census. The reductions contributed to a rising unemployment rate, which reached its highest level since 2021 at 4.6%.

The job creation numbers were delayed due to the 43-day government shutdown.

In November, private payrolls expanded by 69,000, building on October’s increase of 52,000 jobs. Gains were recorded in healthcare, construction, and retail, while manufacturing, leisure and hospitality, and transportation and warehousing experienced declines. 

“I think that from the private sector point of view…it’s a solid upward trajectory,” said National Economic Council Director Kevin Hassett. “The President’s private sector job creation since he took office is about 700,000 jobs.” 

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The Department of Labor underscored this point.

“Under the Biden administration, most job growth came from government jobs and foreign labor,” its official X account posted on Tuesday. “Now, with (President Trump) at the helm, every single job created has been in the PRIVATE SECTOR for NATIVE-BORN AMERICANS.”

Under the Biden administration, most job growth came from government jobs and foreign labor.

Now, with @POTUS at the helm, every single job created has been in the PRIVATE SECTOR for NATIVE-BORN AMERICANS ???? pic.twitter.com/ylLCfxmcza

— U.S. Department of Labor (@USDOL) December 16, 2025

Although the newly released figures carry some qualifications, the report will shape how investors assess next year’s interest-rate trajectory. The Federal Reserve cut rates for a third consecutive meeting last week to bolster what Chair Jerome Powell described as a “gradually cooling” job market facing “significant” risks of further weakening.

Manhattan Institute Fellow Allison Schraeger says this month’s job reports could lead to a future Federal Reserve rate cut. “If you are looking for an excuse to cut further, you could probably say the labor market is weakening and I’m going to do something about it.”