US job growth showed signs of stagnation in November, with nonfarm payrolls increasing by 64,000 following a substantial decline of 105,000 in October. This data, released by the Bureau of Labor Statistics (BLS), indicates a continued cooling trend in the labor market, as the unemployment rate rose to 4.6 percent, the highest level in four years.
The October payroll drop was notably attributed to a 162,000 contraction in federal government employment. This shift occurred as workers accepted deferred resignation offers from the Trump administration, leading to their official removal from the payroll count. As a result, the BLS did not publish an unemployment rate for October due to difficulties in retroactively collecting data following the recent government shutdown.
Labor Market Trends and Economic Implications
The increase in payrolls for November, despite the previous month’s decline, reflects ongoing volatility in the labor market. While private payrolls rose by 69,000 in November, this was a modest improvement compared to the 52,000 jobs added in October. Employment sectors such as health care, social assistance, and construction contributed to this growth, while fields like transportation, warehousing, and leisure and hospitality experienced declines.
“Both October’s and November’s jobs prints appear weak,” noted a report from Bloomberg Economics. “There’s a glimmer of (very gradual) improvement in private-sector hiring, but the concentration of hiring is worrisome.”
The rise in the unemployment rate can be partly explained by a surge in individuals returning to the workforce. The participation rate—the share of the population either working or seeking employment—has also shown a slight increase. This uptick was particularly notable among prime-age workers, those aged 25-54. However, the number of long-term unemployed workers, those out of work for 27 weeks or more, has reached levels not seen since late 2021.
The job market’s sluggishness is further reflected in other economic indicators. Although job openings rose in October, hiring activities have diminished, leading to a rise in layoffs. Notable announcements from companies like Verizon Communications and Amazon regarding planned layoffs have negatively impacted consumer sentiment.
Federal Reserve’s Response and Future Outlook
These labor market developments are likely to influence discussions within the Federal Open Market Committee (FOMC) regarding interest rate adjustments. Federal Reserve Chairman Jerome Powell described the labor market as “gradually cooling” and highlighted significant risks of a further slowdown. While some committee members advocate for additional rate cuts next year, others are more cautious, with projections indicating only one reduction in 2026.
The average hourly earnings saw a modest increase of 0.1 percent in November, following a more substantial 0.4 percent rise in the previous month. This metric is closely monitored as it serves as a driver of household spending, which has become increasingly uneven, with wealthier Americans contributing disproportionately to overall economic activity.
As the labor market navigates these challenges, the BLS has implemented changes to its reporting due to the impacts of the government shutdown. The November report was originally scheduled for release on December 5, but the agency had to adapt its methodology, combining October and November data to present a clearer picture of the current economic landscape.
The evolving conditions in the job market underscore the complexities facing policymakers and highlight the need for continued monitoring of economic indicators. As the situation develops, the implications for both the labor force and broader economic health remain critical areas for analysis and discussion.
