US Jobs Grow Modestly as Jobless Rate Hits 4.6%
Key Points
- Delayed data show the US added 64,000 jobs in November but lost 105,000 in October
- Unemployment rose to 4.6%, the highest level since 2021, despite job gains
- Large federal layoffs tied to DOGE buyouts distorted October and November figures
- Weak wage growth and a surge in involuntary part-time work highlight labor cooling
Mixed November report after shutdown-driven data blackout
The latest US employment data, released after a 43‑day federal government shutdown delayed normal publication, point to a labor market that is weakening but difficult to read. The Bureau of Labor Statistics (BLS) said nonfarm payrolls rose by 64,000 in November, above consensus forecasts of around 40,000–50,000. At the same time, the unemployment rate climbed to 4.6%, up from 4.4% in September and the highest since September 2021. Because the shutdown prevented household surveys in October, the BLS did not publish an October unemployment rate and instead released only partial establishment data alongside the November report. Revisions also showed that August and September payrolls were 33,000 lower than previously reported, leaving the economy with only about 100,000 net new jobs since April and sharply slower year‑over‑year employment growth.
October job losses and the impact of federal workforce cuts
The delayed release provided the first official look at October payrolls, which showed a decline of 105,000 jobs. That drop was driven largely by federal government employment, which fell by about 157,000–162,000 in October as workers who had accepted earlier buyout or deferred resignation offers under the Department of Government Efficiency (DOGE) finally came off the payrolls. Analysts and economists across several reports described these DOGE‑related cuts as a one‑time, planned adjustment that heavily distorts the headline figures. Federal employment has fallen by roughly 271,000 since January, and government payrolls declined by another 5,000 in November, including 6,000 federal jobs. Several commentators argued that, once these government effects are stripped out, private‑sector hiring looks notably stronger than the headline totals suggest.
Sector trends: healthcare and construction offset losses elsewhere
Hiring in November was highly uneven across industries. Healthcare remained the main engine of job growth, adding about 46,000 positions, with gains spread across ambulatory services, hospitals, and nursing and residential care facilities. Construction employment rose by 28,000 after having been broadly flat over the prior year, with nonresidential specialty trade contractors accounting for much of the increase. Social assistance added roughly 18,000 jobs. By contrast, transportation and warehousing shed about 18,000 positions, and manufacturing employment fell by 5,000. Leisure and hospitality also saw job losses in some accounts, despite expectations of seasonal hiring. Overall, private payrolls increased by about 69,000 in November, while public‑sector payrolls edged lower.
Wages, underemployment and participation signal a cooler market
Pay and hours data reinforced the picture of a cooling labor market. Average hourly earnings rose just 0.1% on the month and 3.5% year over year in November, down from 3.7% in October and well below the 5.9% peak seen in 2022. Analysts noted that this pace suggests wages are not adding to inflation pressures. At the same time, underemployment increased. The number of people working part time for economic reasons rose by about 909,000 from September to 5.5 million in November, pushing the broader U‑6 measure of labor underutilization up to 8.7%, above its pre‑pandemic level. Long‑term unemployment also ticked higher, with about 1.9 million people jobless for 27 weeks or more, above pre‑pandemic readings. The labor force participation rate edged up to 62.5%, the highest since April, while the employment‑population ratio slipped to 59.6%.
Fed policy debate intensifies amid noisy but weaker data
The muddied jobs figures arrive just days after the Federal Reserve delivered its third interest‑rate cut of the year, a quarter‑point move officials framed as “normalization” aimed at stabilizing a softening labor market while inflation remains above the 2% target. Fed Chair Jerome Powell and other policymakers had already warned that shutdown‑related disruptions and survey issues were likely to make the October and November data less reliable, and some analysts said the latest report should be viewed with a “skeptical eye.” Still, the rise in unemployment to 4.6% and the weak three‑month average job gain of about 22,000 have strengthened arguments inside and outside the Fed for additional easing if labor conditions deteriorate further. Market pricing after the release showed investors largely expecting at least one more rate cut next year, while several commentators said the November print both validates the December cut and increases the odds of another move as early as January.
Key Takeaways
- Headline job gains mask a sharp structural hit from federal layoffs, making private-sector conditions look firmer than the top-line numbers alone.
- Rising unemployment, softer wage growth and a jump in involuntary part-time work point to a labor market that is clearly cooling, even if not collapsing.
- Data distortions from the shutdown and DOGE buyouts mean the Fed is likely to lean on upcoming, cleaner reports before deciding how quickly to cut rates further.
References
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