A job seeker speaks with a recruiter at the KeySource booth at the Mega Job News USA South Florida Job Fair at Amerant Bank Arena on April 30, 2025 in Sunrise, Florida.
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Nonfarm payrolls grew slightly more than expected in November but slumped in October, with the unemployment rate hitting a four-year high, the Bureau of Labor Statistics said Tuesday in numbers delayed by the government shutdown.
Job growth for the month was a seasonally adjusted 64,000 jobs, more than the Dow Jones Industrial Average’s forecast of 45,000 jobs, an increase from a sharp decline in October.
The unemployment rate rose to 4.6%, higher than expected and the highest level since September 2021. More comprehensive measures, which include disengaged workers and those in part-time work for financial reasons, pushed the unemployment rate to 8.7%, with its peak dating back to August 2021.
In addition to its November report, the BLS released a shortened tally for October showing that payrolls decreased by 105,000 jobs. Although there were no official estimates, Wall Street economists had largely expected a decline after September’s unexpected increase of 108,000 jobs.
October’s slump was due to a significant drop in government employment as the furlough deferral introduced earlier this year took effect. Government payrolls fell by 162,000 jobs in the same month, and by another 6,000 jobs in November.
October’s decline marks the third time in six months that the number of employees has been at a net negative level. The BLS report also showed that the August statistics were revised downward by 22,000 cases, representing a significant decrease of 26,000 cases, and the original statistics for September were revised downward by 11,000 cases.
The BLS had warned that the Household Survey, which is used to calculate the unemployment rate, would be affected for several months by the shutdown. Both the employment report and the closely watched consumer price index were canceled because October’s statistics were difficult to obtain.
Despite the complex situation, the report painted a familiar picture of the labor market.
The employment situation continues to be low with fewer jobs and fewer layoffs, with strict border measures under President Donald Trump also contributing to an exodus of labor from the regular influx of immigrants.
Most of November’s gains came from closer to home, with health care adding 46,000 jobs, accounting for more than 70% of the total net increase, according to establishment figures. Construction increased by 28,000 people, and social assistance increased by 18,000 people.
On the downside, transportation and warehousing lost 18,000 jobs, part of a continuing trend of job losses in the sector. The leisure and hospitality industry also suffered a loss of 12,000 jobs.
“The U.S. economy is in an employment recession,” said Heather Long, chief economist at Navy Federal Credit Union. “Over the past six months, the country has added just 100,000 jobs. The majority of those jobs are in health care, an industry that is almost constantly hiring as America’s population ages.”
However, the White House interpreted the report positively.
“The strong jobs report shows how President Trump is repairing the damage caused by Joe Biden and building a strong America First economy in record time,” White House press secretary Caroline Leavitt said in a statement. “Worker wages are rising, prices are falling, trillions of dollars in investment are flowing into our country, and the American economy is poised for a boom in 2026.”
From a policy perspective, the Fed has been forced to walk a difficult line between preventing further weakness in the labor market and preventing persistently high inflation from exacerbating.
At its most recent meeting, the central bank cut its key interest rate by a quarter of a percentage point, but signaled the hurdles for further rate cuts are even higher. The Fed has approved its third consecutive rate cut since September, lowering the benchmark fund rate to its target range of 3.5% to 3.75%.
“Given the data turmoil, it’s unlikely that the Fed will give much weight to today’s report,” said Kay Haig, global co-head of fixed income and liquidity solutions at Goldman Sachs Asset Management. “The December jobs report, to be released in early January ahead of the Fed’s next meeting, is likely to be a more meaningful indicator for the Fed in determining its near-term policy trajectory.”
In the market, the possibility of further interest rate cuts in January remains low. The odds were about 24.4% after the jobs report, unchanged from Monday, according to CME Group’s FedWatch.
Fed officials have maintained that the labor market is not a source of inflation, and Tuesday’s jobs report supported that claim.
The average hourly wage increased only 0.1% in the same month, lower than the expected 0.3% increase, and increased 3.5% year-on-year, the smallest annual increase since May 2021.
The 0.1 percentage point increase in the unemployment rate was primarily due to the increase in the labor force.
Over the two-month period, household employment actually increased by 407,000 people. However, this was partially offset by an increase in the labor force of 323,000 people, as the participation rate increased slightly to 62.5%.
In other economic news Tuesday, the Commerce Department reported that retail sales were flat in September, against an expected 0.1% increase, according to a figure adjusted for seasonality rather than inflation. However, excluding automobiles, sales rose 0.4%, beating expectations for a 0.2% increase.
