The headline:
The economy added 64,000 jobs in November, and the unemployment rate rose to 4.6%, the Bureau of Labor Statistics said Tuesday in a report that was delayed by the 43-day government shutdown.
Forecasters had expected roughly 45,000 new jobs and for the unemployment rate to hold at 4.4%.
The October jobs report was canceled because of the government shutdown, so this latest report also contained the first update on employment in that month. It showed that payrolls declined by 105,000, driven by a contraction in the federal workforce.
The unusual circumstances because of the shutdown
The report released Tuesday morning was originally supposed to be published Dec. 5, but it was delayed by the shutdown, which ended in early November.
If not for the shutdown, the jobs report for October would have been published on Nov. 7. That report was canceled, and any information that had been collected for it was instead included in this latest report.
That means that investors and policymakers have less detailed information about the recent health of the economy than normal. It also means that the government data series for the unemployment rate, which stretches back to 1948, might miss an entry permanently.
The interpretation
Brian Marks, executive director of the University of New Haven’s Entrepreneurship and Innovation Program, told the Washington Examiner that, while this report is just one data point, “it is showing continued weakness in the labor market.”
Still, the report came in with a slightly better headline jobs number than anticipated. Dan North, a senior economist with Allianz Trade Americas, said it supports the case that the Federal Reserve might conduct one rate cut in 2026.
“Non-farm payrolls came out better than expected, which kind of supports our case of one more cut, but not until the second half of next year, because inflation still hasn’t given up, and this data looks like we still are growing jobs,” he told the Washington Examiner.
“So, kind of it doesn’t tell us much different than we’ve seen before,” he added.
What it means for … Trump
Tuesday’s report shows that the labor market was slowing as the government came out of the shutdown and winter began. Job growth was weaker over the summer than originally thought, as the downward revisions to payroll jobs in August and September of 33,000 show.
President Donald Trump fired the commissioner of the agency following the report for July, which had shown unusually large downward revisions to previous months’ job gains.
In November, the private sector added 69,000 jobs, but the public sector showed losses because of the Trump administration’s deferred resignation program for federal employees.
A major question still hanging over the jobs market is the role played by Trump’s immigration policies, which have massively slowed net migration into the country and may even have turned it negative.
Lower immigration rates likely slow the growth of the workforce, although they might not necessarily entail rising unemployment, since a decline in immigrant labor would also shrink the denominator of the unemployment rate.
What it means for … the Fed
Tuesday morning’s report led investors to slightly increase the odds that Federal Reserve officials will cut their interest rate target at their next meeting, scheduled for late January. But a cut is still seen as highly unlikely.
Trump has pressed for months for Federal Reserve Chairman Jerome Powell to lower rates to boost borrowing and spending.
The underlying reality
Tuesday’s report showed that employment growth has slowed to a point that might raise fears about unemployment.
It is helpful to look at the overall trend for the labor market. With revisions to the numbers for July and August and a decline in employment in October, the three-month moving average of job gains was 22,000 in November. That is below the rate needed to keep up with population growth.
Roughly 112,000 new payroll jobs are needed each month to keep unemployment from rising — the “breakeven rate” of job growth – according to one estimate from the Federal Reserve Bank of Atlanta.
But that figure is highly uncertain, thanks to the Trump administration’s crackdown on illegal immigration. The breakeven rate might be closer to zero if net migration has stalled, and it might even be negative if more people are leaving the country than entering.
Prime-age employment, relative to the overall population, is strong by historical standards. It dipped very slightly in November.
Recession watch
The unemployment rate, taken from the jobs report’s household survey, is still low by historical standards, but it is rising. It rose a tenth of a percentage point to 4.6% in November.
Recessions entail a rising unemployment rate.
Tuesday’s data suggests that the U.S. labor market is coming closer to triggering one major recession indicator — namely, when the three-month moving average of the unemployment rate rises half a percentage point relative to its minimum point over the past year. This indicator, known as the Sahm Rule, had signaled the start of all postwar recessions.
The indicator had been triggered in mid-2024, but is no longer signaling a recession — but it’s coming close.
Federal government employment
Federal government employment fell by 162,000 in October, a major decline attributable to the end of the deferred resignation program promoted by the Trump administration at the end of September. Federal employment fell another 6,000 in November, and is now down about 268,000 since Trump came into office. The number of federal employees is a key statistic to watch to see the effects of the budget-cutting efforts of the Trump administration and the Department of Government Efficiency.
Manufacturing employment
Employment in manufacturing declined by 5,000 in November, adding to a downward trend.
The manufacturing sector is of particular interest because Trump has said that his tariffs will bring manufacturing to the U.S. from other countries. He’s imposed tariffs on China and trading partners around the world, and on steel, aluminum, autos, auto parts, and a number of other goods and services.
So far, though, the sector has lost more than 50,000 jobs during his time in office.
Other industries
The leisure and hospitality sector has, over the past year, exceeded the employment levels it reached in February 2020, right before restaurants and bars were forced to shut down across the country. It’s continued to grow steadily, although it declined very slightly in November.
Construction employment appears to be improving after the housing market took a massive hit over the past few years, as mortgage rates have soared alongside the Fed’s rate hikes. The sector is also under pressure from Trump’s tariffs and his immigration overhauls.
Economists will watch closely for any further signs of slowing hiring in construction.
Unemployment rates by race/ethnicity
The household survey also includes unemployment rates by race and ethnicity. Rates for all groups neared record lows in the past few years, but have risen in recent months.
In particular, the unemployment rate for black workers jumped to 8.3% in November, the highest such rate in more than four years.
