Commerce Secretary Howard Lutnick blamed a Democrat government shutdown and mass deportations—not President Trump’s tariff policies—for November’s unexpected 32,000-worker drop in private payrolls.
Quick Take
- Private payroll employment fell 32,000 in November 2025, marking a sharp reversal from October’s gains
- Small businesses with fewer than 50 workers bore the brunt, losing 120,000 jobs while larger firms gained 90,000
- Administration attributes decline to Democrat shutdown and deportation efforts, not tariff policies
- Commerce Secretary predicts recovery in 2026 with GDP growth exceeding 4%
Small Business Struggles Under Recent Policy Shifts
The November employment report revealed a troubling trend for America’s small business sector, with companies under 50 employees shedding 120,000 jobs. This represents a significant vulnerability in the labor market, as small businesses have traditionally been engines of job creation and economic resilience.
The contrast with larger firms, which added 90,000 workers, underscores how policy decisions disproportionately impact smaller operations that lack the resources to absorb economic disruptions.
Bad jobs report caused by shutdown, deportations — not tariffs, Lutnick says https://t.co/siOycVMXiD
— CNBC (@CNBC) December 3, 2025
Government Shutdown’s Lingering Economic Impact
Commerce Secretary Lutnick pointed to the Democrat government shutdown as a primary culprit in the payroll decline. When federal contractors and businesses dependent on government payments face payment delays, they naturally slow operations and defer hiring decisions.
Construction and other government-adjacent sectors experienced particular weakness, demonstrating how bureaucratic dysfunction directly translates to lost jobs for working Americans. This disruption reflects the real-world consequences of Washington’s inability to manage basic fiscal operations.
Deportation Policy and Labor Market Adjustments
The Trump administration’s enforcement of immigration laws through mass deportations has contributed to short-term labor market suppression, particularly among small businesses.
While critics warn of job losses, administration officials frame this as a necessary correction to restore law and order at the border and protect American workers from unfair wage competition.
The temporary employment decline reflects the transition costs of enforcing immigration policy, which the administration views as essential to long-term American prosperity and worker protection.
Tariff Policy Defense and Economic Outlook
Lutnick explicitly rejected suggestions that Trump’s tariff policies caused the November decline, emphasizing instead that trade enforcement serves broader strategic interests.
The Commerce Secretary expressed confidence that employment figures will “rebalance and regrow,” characterizing November as a temporary setback.
He reiterated predictions of GDP growth exceeding 4% in 2026, suggesting the administration views current economic adjustments as necessary corrections that will yield stronger long-term performance and protect American manufacturing and workers from global competition.
