The U.S. labor market swung dramatically in November, adding 64,000 jobs while shedding 105,000 in October. The unemployment rate climbed to 4.6%, the highest level since 2021.
November Gains vs. October Losses
November’s 64,000 net additions surpassed the 40,000 jobs economists had forecast. In contrast, October saw a net loss of 105,000 jobs, largely driven by a 162,000-person drop in federal workers who resigned at the end of fiscal year 2025 on Sept. 30 after billionaire Elon Musk’s purge of U.S. government payrolls.
Labor Department Revisions and Earlier Months
Revisions by the Labor Department also removed 33,000 jobs from August and September payrolls, further tightening the picture of employment growth.
Uncertainty and Policy Headwinds
Hiring momentum has stalled amid uncertainty over President Donald Trump’s tariffs and the lingering effects of the high interest rates the Federal Reserve raised in 2022 and 2023 to curb inflation. Since March, job creation has fallen to an average of 35,000 a month, down from 71,000 in the year ending March.
Delays from the 43-Day Shutdown
Both October and November job figures were released Tuesday, delayed because of a 43-day federal government shutdown. The postponements have complicated deliberations at the Federal Reserve, where policymakers are split over whether the labor market needs further easing.
Fed Rate Cut and Diverging Views
Last week, the Fed trimmed its benchmark interest rate by a quarter of a percentage point for the third time that year. Three officials opposed the cut, the most dissents in six years. Two voted to keep the rate unchanged while inflation remained above the 2 % target. Stephen Miran, appointed by Trump in September, voted for a larger cut-aligning with the president’s demands.
Samuel Tombs’ Assessment
Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics, wrote in a commentary: “the labor market remains weak, but the pace of deterioration probably is too slow to spur the (Fed) to ease again in January,”. The Fed will meet again on Jan. 27-28.
Unemployment and Labor-Force Growth
The unemployment rate, still modest by historical standards, has risen from a 54-year low of 3.4 % in April 2023 to 4.6 % in November. It was 4.4 % in September, and the labor-force size increased 323,000 from September. A rate for October was unavailable because of the shutdown.
Kevin Hassett’s Explanation
Kevin Hassett, director of the White House National Economic Council, said the uptick in unemployment likely reflects former federal workers seeking new jobs. “Probably what’s going on is the 250,000 federal government workers who took the buyout are staying in the labor force and looking for work” and are counted as unemployed until they find new jobs, Hassett told reporters.
Jerome Powell on Over-counting
Fed Chair Jerome Powell said the central bank believes hiring has been over-counted by about 60,000 jobs a month since spring. “You can say that the labor market has continued to cool gradually, maybe just a touch more gradually than we thought,” Powell said at a news conference.
Wage Growth
Workers’ average hourly earnings rose just 0.1 % from October, the smallest gain since August 2023. Year-over-year, pay increased 3.5 %, the lowest level since May 2021.
Sectoral Highlights
Health-care employers added more than 46,000 jobs in November, accounting for over two-thirds of the 69,000 private-sector jobs created that month. Construction firms added 28,000 jobs. Manufacturing lost 5,000 jobs in November, its seventh straight month of decline.
Thomas Feltmate’s Commentary
Thomas Feltmate, senior economist at TD Economics, wrote: “The takeaway is that the labor market remains on a relatively soft footing, with employers showing little appetite to hire, but are also reluctant to fire.” He added, “That said, labor demand has cooled more than supply in recent months, which is what’s behind the steady upward drift in the unemployment rate.”
Impact of Automation
Matt Hobbie, vice president of staffing firm HealthSkil in Allentown, said: “We’re in Lehigh Valley, which is a big transportation hub in eastern Pennsylvania.” He added, “We’ve seen some cooling in the logistics and transportation markets, specifically because we’ve seen automation in those sectors, robotics.”
Data Catch-Up After the Shutdown
Because of the shutdown, many agencies are playing catch-up. The Labor Department released the September jobs report on Nov. 20, seven weeks late, and published some October data-including the count of jobs created that month by businesses, nonprofits, and government agencies-along with the November report Tuesday.
Corporate Hiring Reluctance
American companies are mostly holding onto the employees they have. They are reluctant to hire new ones as they struggle to assess how to use artificial intelligence and how to adjust to Trump’s unpredictable policies, especially his double-digit taxes on imports from around the world.
Job-Seeker Struggles
In May, Amy Beckrich, 54, of Farmington, Minnesota, lost her human-relations job at a consulting firm. She has applied for more than 100 positions. Even landing interviews is difficult. She finally got one, waited 20 minutes-then the recruiter never showed up. Her unemployment benefits ran out this month. “It’s tough going into the holidays without any prospects or income,” she said. Her husband is still employed, but they have had to cut back. They have put off replacing their car and rarely go out to eat anymore.
“I feel like the hiring system is broken,” Beckrich said. “The human factor has completely disappeared.”
Closing
The latest jobs figures paint a picture of a labor market that has slowed, with hiring gains outpaced by significant losses and a rise in the unemployment rate. The Fed’s recent rate cut and the ongoing debate over monetary policy reflect the uncertainty that continues to weigh on employers and job seekers alike.
Key Takeaways
- November added 64,000 jobs, but October lost 105,000, largely due to federal worker retirements.
- The unemployment rate climbed to 4.6 %, the highest since 2021.
- The Fed cut rates again, but division among officials signals caution amid cooling labor demand.
The labor market remains on a soft footing, with employers hesitant to hire and many workers still searching for new opportunities.
