In a recent Labor Statistics report, jobs growth has shown slightly better-than-expected results for November, while October figures faced significant downward revisions. A total of 64,000 nonfarm payroll jobs were added in November, exceeding financial analysts’ estimates of 45,000. In contrast, the BLS reported a decline of 105,000 jobs for October, attributed primarily to a 162,000 drop in government employment due to previously deferred layoffs.
This rise in November is noteworthy against a backdrop of rising unemployment, which climbed to 4.6%—its highest level since September 2021. A broader measure of unemployment, which includes those too discouraged to search for jobs and those working part-time for economic reasons, surged to 8.7%, marking its highest level since August 2021. The report indicated that the shutdown had affected data collection, delaying the release of these statistics.
In the job market, the gains were largely driven by the healthcare sector, which added an impressive 46,000 jobs. Construction also contributed positively with an increase of 28,000 jobs, while social assistance provided 18,000 jobs. However, some sectors faced losses: transportation and warehousing experienced a decline of 18,000 jobs, and leisure and hospitality saw a reduction of 12,000 jobs.
The report has raised concerns among economists regarding the overall health of the labor market. Experts are now describing the U.S. economy as facing a “jobs recession,” with a net gain of only 100,000 jobs across the past six months primarily concentrated in healthcare. Heather Long, a chief economist, noted that this industry tends to remain stable due to demographic trends related to an aging population.
From a policy standpoint, the Federal Reserve is navigating a challenging landscape, attempting to stabilize the labor market while also managing inflation rates that remain persistently high. The Fed recently reduced its key interest rate by a quarter percentage point, marking the third consecutive cut since September. Discussions are ongoing regarding potential future adjustments, with market predictions suggesting a 24.4% chance of another rate cut in January.
Meanwhile, growth in average hourly earnings was disappointingly low, increasing by only 0.1% in November—below the expected 0.3%—while annual growth stood at 3.5%, the smallest since May 2021. The rise in the unemployment rate reflects a growth in the labor force, as household employment rose by 407,000. The labor force participation rate edged up to 62.5%, suggesting that more individuals are entering the job market.
Additionally, retail sales data released by the Commerce Department showed stagnant sales figures for September, aligning with economic forecasts. Excluding automobile sales, there was a 0.4% increase, slightly better than initial expectations.
Overall, the labor market appears to be in a precarious state, prompting analysis and speculation regarding future economic policies as the Federal Reserve strives to balance these evolving dynamics.
