Jobless claims are at a three-year low, but companies are planning more cuts, and wages for the 60 million workers who make up the Labor Economy have slipped.
PYMNTS Intelligence’s Wage to Wallet Index data showed that these consumers are still shopping, although earnings reports illustrate that they are trading down and concentrating spending in value channels instead of pulling back entirely.
Unemployment Filings Dip
In the latest volley of employment-related data, the Department of Labor said Thursday (Dec. 4) that seasonally adjusted initial unemployment claims fell to 191,000 for the week ending Nov. 29, a decrease of 27,000 from the previous week and the lowest level since September 2022. The four-week moving average declined to 214,750, and the insured unemployment rate held steady at 1.3%.
The readings reflect a labor market where employers are holding on to workers.
Layoffs Remain Concentrated
Separately, executive outplacement firm Challenger, Gray and Christmas said Thursday that employers announced 71,321 job cuts in November, up 24% from November 2024. Year-to-date job cut announcements increased to 1.17 million through November, the highest level since 2020.
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The telecommunications sector cut 15,139 jobs in November, with Verizon accounting for most telecom job losses. Retail cuts increased from 2,431 in October to 3,290 in November.
In terms of year-to-date cuts, the retail sector has announced 91,954 job cuts, up 139% from the same period last year. The food sector has cut 34,165 jobs, up 26% from last year.
PYMNTS Intelligence’s Wage to Wallet Index identifies the Labor Economy as roughly 60 million workers earning $25 an hour or less. These are hourly and frontline workers in logistics, healthcare support, construction, food service and retail. They make up one-third of the workforce and account for approximately 15% of total consumer spending in the United States.
Even small shifts in their income influence spending in local services and retail.
PYMNTS Intelligence’s November Wage to Wallet Index found that Labor Economy wages declined 0.81% in October, moving from $19.55 to $19.39 per hour. The change implies a $14 billion annualized pullback in spending. Millennials accounted for more than half of the spending decline, and households earning below $30,000 per year experienced the largest reductions.
Job Sentiment Wanes
The November Wage to Wallet Index measured personal job security sentiment at 76.6 in November, down 5.3 points from October.
Other sentiment categories remained mostly flat. The shift indicates workers believe jobs remain available but are less confident they will keep consistent hours and steady income.
Labor Economy workers remain active in the marketplace but are prioritizing value and price certainty. During its third-quarter 2025 earnings report, Dollar General shoppers are still spending while focusing more on essential goods.
“I would tell you that the low- and middle-income consumer continues to be stretched,” Dollar General CEO Todd Vasos said during an earnings call. “She is definitely being very mindful of where she shops and what she shops for, making trade-offs at the shelf in many instances.”
Meanwhile, third-quarter 2025 earnings results from Dollar Tree showed consumers leaning into discount offerings. CEO Mike Creedon said during an earnings call that the company also saw “strong end of quarter momentum heading into the holidays,” amid the “budget-constrained environment that many consumers find themselves today … while the consumer landscape remains uneven, the underlying story remains consistent: All consumers are seeking value.”
These developments corroborate Wage to Wallet Index findings that consumer spending is holding up while changing composition.
Credit Fills the Gap
The November Wage to Wallet Index showed that 33.8% of Labor Economy workers always or usually carry revolving credit card balances. Their average credit card balances equal more than 22% of their annual income.
Discount retail traffic continues even while wage pressure and uncertainty rise. Consumers are not disengaging from the economy. They are adjusting behavior through smaller purchases, price comparison, unit cost sensitivity and a preference for private brand products that provide more predictable value.
The November Wage to Wallet Index showed that underlying Labor Economy forces can change spending patterns before they show up in broader economic reports.
