Employees inspect garments at a garment manufacturer in Los Angeles. Photographer: Meg Roussos/Bloomberg.
U.S. job growth remained sluggish in November, and the unemployment rate rose to a four-year high, pointing to a continued cooling in the labor market after a weak October.
Non-farm payrolls increased 64,000 in November after declining 105,000 in October, adding to the choppiness seen in the labor market in recent months. The unemployment rate rose to 4.6 percent, according to Bureau of Labor Statistics (BLS) data out today, continuing its upward climb as many out-of-work Americans struggle to land new jobs.
The decline in October payrolls, which was the largest since the end of 2020, was due to a 162,000-position plunge in federal government employment as workers who accepted the Trump administration’s deferred resignation offers officially dropped off payrolls.
While the data comes with caveats, the report will help inform investors’ expectations for the path of interest rates next year. The Federal Reserve lowered rates for a third straight meeting last week to support what Chair Jerome Powell called a “gradually cooling” labor market with “significant” risks of a further slowdown.
However, Fed officials are split over whether more cuts are needed next year. The median Fed official penciled in just one reduction in 2026, according to rate projections released alongside the decision, but some policymakers expect to enact no further cuts. Traders, meanwhile, have been counting on two.
| Metric | Actual | Median estimate |
|---|---|---|
| Change in November payrolls (month-over-month) | + 64,000 | + 50,000 |
| Unemployment rate | 4.6% | 4.5% |
| Average hourly earnings (month-over-month) | +0.1% | +0.3% |
“The labor market remains weak, but the pace of deterioration probably is too slow to spur the FOMC to ease again in January,” said Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics, referring to the Fed’s policy-setting Federal Open Market Committee.
A separate report out today showed retail sales were little changed in October as a decline at auto dealers and weaker gasoline receipts offset stronger spending in other categories. And figures from S&P Global showed U.S. business activity expanded in December at the slowest pace in six months, while a measure of input prices jumped to a more-than-three-year high.
The advance in November payrolls was driven by healthcare and social assistance as well as construction. Private payrolls increased by 69,000 in November, after adding 52,000 jobs the prior month. Employment fell in transportation and warehousing as well as leisure and hospitality.
“From the private sector point of view, it’s just about what we’ve been getting all year,” Kevin Hassett, director of the White House National Economic Council, said on CNBC. It’s a “solid upward trajectory.”
.What Bloomberg economists say...“Both October’s and November’s jobs prints appear weak. There’s a glimmer of (very gradual) improvement in private-sector hiring, with AI data-center demand providing some hiring impetus for construction workers. But the concentration of hiring is worrisome—and, in hindsight, the FOMC was correct to cut rates at the December meeting.”— Anna Wong, Stuart Paul & Chris G. Collins, economists |
The rise in the unemployment rate from September to November reflects a surge in those returning to the workforce. The participation rate—the share of the population that is working or looking for work—also ticked higher. The rate for workers ages 25 to 54, known as “prime-age workers,” edged up from September.
Meanwhile, the number of people who are long-term unemployed—out of work for 27 weeks or more—rose to one of the highest levels since the end of 2021. Those working part time for economic reasons jumped from September by the most since the onset of the pandemic.
The unemployment rate for Black Americans jumped to 8.3 percent, the highest since 2021, in part reflecting increased participation. The jobless rate also surged for Black teenagers.
Other data also suggest the labor market is sluggish. U.S. job openings picked up in October, though there was less hiring and more layoffs. Planned layoffs have been high in recent months, reflecting announcements from U.S. companies like Verizon Communications Inc. and Amazon.com Inc. and subsequently weighing on consumer sentiment.
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