U.S. job growth rebounded modestly in November, with nonfarm payrolls rising by 64,000, according to data released Tuesday by the Bureau of Labor Statistics after delays caused by the government shutdown. The increase came in above economists’ expectations of 45,000, offering some relief after a steep decline the month before.
Alongside the November figures, the BLS released an abbreviated October report showing payrolls fell by 105,000, a sharper downturn than many on Wall Street had anticipated. While there was no official consensus estimate for October, economists were broadly expecting a pullback following September’s unexpected gain of 108,000.
The October decline was driven largely by a sharp reduction in government employment, as deferred layoffs implemented earlier in the year began to take effect. Government payrolls dropped by 162,000 in October and declined by another 6,000 in November.
October marked the third negative payroll reading in the past six months, underscoring a labor market that has lost momentum. The BLS also revised earlier data, cutting August payrolls by 22,000 to reflect a deeper loss of 26,000 jobs, while September’s figure was revised down by 11,000.
The unemployment rate rose to 4.6% in November, coming in higher than expected. The BLS warned that data from the household survey, which determines the unemployment rate, will remain distorted for several months due to shutdown-related disruptions. Those same challenges led to the cancellation of October’s jobs report and the consumer price index release.
Despite the data complications, the overall picture remains consistent: the labor market is experiencing low hiring and low firing, with growth further constrained by stricter border policies under President Donald Trump that have reduced the flow of immigrant workers.
For policymakers, the mixed signals present a delicate balancing act. The Federal Reserve is attempting to support the labor market without reigniting inflation pressures. At its most recent meeting, the Fed cut interest rates by a quarter percentage point, while signaling that further reductions will face a higher bar. The move marked the third consecutive rate cut since September, bringing the benchmark rate to a 3.5%–3.75% range.
Importantly for the Fed, wage growth continues to cool. Average hourly earnings rose just 0.1% in November, below expectations of 0.3%, and were up 3.5% from a year earlier, the slowest annual increase since May 2021. The data reinforces the Fed’s view that the labor market is not currently a major source of inflation pressure, even as job growth shows signs of strain.
