US Job Market Sees Slight Growth in November, but Unemployment Hits Four-Year High
A job seeker speaks with a recruiter at the KeySource booth at the Mega JobNewsUSA South Florida Job Fair held in the Amerant Bank Arena in Sunrise, Florida, on April 30, 2025.
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Nonfarm payrolls grew slightly more than expected in November but slumped in October while unemployment hit its highest in four years, the Bureau of Labor Statistics reported Tuesday in numbers delayed by the government shutdown. The latest jobs report highlights the challenges faced by the US labor market, with job growth totaling a seasonally adjusted 64,000 for the month, better than the Dow Jones estimate of 45,000 and up from a sharp decline in October.
Unemployment Rate Rises to 4.6%
The unemployment rate rose to 4.6%, more than expected and its highest level since September 2021. A more encompassing measure that includes discouraged workers and those holding part-time jobs for economic reasons swelled to 8.7%, its peak going back to August 2021. This increase in unemployment rates is a concern for policymakers, as it indicates a slowdown in the labor market.
In addition to the November report, the BLS released an abbreviated October count that showed payrolls down 105,000. While there was no official estimate, Wall Street economists were largely expecting a decline following a surprise increase of 108,000 in September. The October slump came from a steep fall in government employment as deferred layoffs instituted earlier this year took effect.
Sector-Wise Job Growth
The jobs climate continues to be one of low hiring and low firing, affected as well by stringent border practices under President Donald Trump that have drained the workforce of the usual influx of immigrants. The establishment numbers showed most of the gains in November came from a familiar source — health care added 46,000 jobs, accounting for more than 70% of the total net increase. Construction rose by 28,000, while social assistance contributed 18,000.
On the down side, transportation and warehousing was off 18,000, part of a continuing trend in job losses for the sector. Leisure and hospitality also posted a loss of 12,000. According to Heather Long, chief economist at Navy Federal Credit Union, “The U.S. economy is in a jobs recession. The nation has added a mere 100,000 in the past six months. The bulk of those jobs were in healthcare, an industry that is almost always hiring due to America’s aging population.”
Federal Reserve’s Stance
From a policy perspective, the Federal Reserve has had to work a difficult line between trying to head off further weakness in the labor market and guarding against making stubbornly high inflation worse. At its most recent meeting, the central bank lowered its key interest rate by a quarter percentage point but signaled that the bar is higher for additional cuts. The Fed has approved three consecutive reductions since September, taking its benchmark funds rate down to a target range of 3.5%-3.75%.
According to Kay Haigh, global co-head of fixed income and liquidity solutions at Goldman Sachs Asset Management, “The Fed is unlikely to put much weight on today’s report given data disruptions. The report on December’s employment data, released in early January ahead of the next meeting, will likely be a much more meaningful indicator for the Fed when it comes to deciding the near-term policy trajectory.”
Conclusion and Next Steps
Markets continued to put low odds on another rate cut in January. The probability was around 24.4% following the jobs report, unchanged from Monday, according to the CME Group’s FedWatch. Fed officials have maintained that the labor market is not a source of inflation, and Tuesday’s jobs report backed up that assertion. Average hourly earnings rose just 0.1% for the month, below the estimate for 0.3%, and were up 3.5% from a year ago, the smallest annual gain since May 2021.
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Smart Tip for Readers
When interpreting jobs reports, consider the broader economic context, including factors like government policies, inflation rates, and industry trends, to gain a more comprehensive understanding of the labor market. By doing so, you can make more informed decisions about your career and financial planning.
