Unemployment rate hit a four-year high last month
By Alicia Wallace, CNN
(CNN) — The US labor market grew even more exclusive in November.
Unemployment rose to a four-year high of 4.6% in November, and the economy added 64,000 jobs last month, new data from the Bureau of Labor Statistics showed Tuesday.
Last month’s job gains, which came in higher than expected, followed a 105,000-job loss for October, according to a jobs report that was one of the most atypical in recent history.
The longest-ever federal shutdown cast a large shadow over the critical economic indicator. Statistical agencies were largely dark from October 1 to November 12 and were unable to collect, process and analyze data. As such, the BLS did not release a separate jobs report for October.
And, for the first time in nearly 80 years, no unemployment rate was released for October due to a lack of data collection.
Economists were looking for a net gain of 40,000 jobs for November and for the unemployment rate to stay unchanged from its September rate of 4.4%, according to FactSet.
Plenty of quirks to report
November’s report, which was delayed from its original release date of December 5, offered a bit of a catch-up. It was packaged with partial October data that was able to be collected from businesses and other entities.
The BLS’ monthly snapshot of the labor market is generated from two robust surveys: one of businesses and the other of households. The establishment survey responses are largely submitted electronically while the household surveys are conducted mostly in person and over the phone.
However, the latter survey could not be conducted, meaning the labor force data could not be gathered and no unemployment rate could be calculated.
Tuesday’s report was loaded with technical notes from the BLS about the known and unknown effects of the shutdown. In simplest terms: The November household survey data required more back-end math, potentially affecting the reliability; and the establishment data is possibly more accurate because response rates increased during the expanded collection period.
Those overall payroll numbers for October and November aren’t skewed by the hundreds of thousands of furloughed federal workers, the BLS noted. Those workers were eventually paid, so they were counted as employed.
However, that October employment tally already came in with built-in asterisks: The hefty overall employment loss was entirely due to the Trump administration’s cutbacks of the federal workforce that occurred months ago.
Earlier in the year, the administration’s Department of Government Efficiency initiative took a buzzsaw to federal agencies, slashing funding and cutting jobs in the process. Included in those efforts were “fork in the road” deferred resignations that were offered to employees with an effective date on September 30.
As such, October’s employment data shows that the federal government shed 162,000 jobs, a hefty one-time loss that swung the overall month heavily negative.
A ‘jobs recession’
Despite the noise, Tuesday’s jobs report painted a picture of an at-best stagnant labor market.
In addition to the partial October data, Tuesday’s report included revisions for September and August. September’s monthly gains were revised down by 11,000 to 108,000, while August’s job losses deepened to negative 26,000 from a negative 4,000 previously reported.
With one month left to go, the US labor market is on pace for its weakest year of job creation since the job losses of 2020 and, before that, the Great Recession.
“The US economy is in a jobs recession,” Heather Long, chief economist at Navy Federal Credit Union, wrote in commentary issued Tuesday.
The economy has outright lost jobs in three out of the past six months: June, August and October. This follows a stretch of four-plus years without any monthly job loss.
“The nation has added a mere 100,000 in the past six months,” Long wrote. “The bulk of those jobs were in health care, an industry that is almost always hiring due to America’s aging population. Almost all other sectors are flatlining or laying workers off right now.”
Health care and social assistance continued to dominate the employment gains, adding 64,000 jobs in November and 64,600 jobs in October, BLS data showed. The next-highest job gains were in construction, at 28,000 last month, while industries such as manufacturing, transportation and leisure and hospitality lost jobs.
Hiring in most industries has stalled out this year largely because of a highly uncertain environment, said Nicole Bachaud, chief economist at ZipRecruiter.
‘Foggy horizon’ for hiring
The slowdown in job gains coupled with rising unemployment has driven the Federal Reserve to cut rates by a quarter point for three consecutive meetings; however, it takes several quarters for monetary policy changes to work their way through the economy.
The Fed cuts haven’t yet had an impact, Bachaud said in an interview with CNN.
“It hasn’t translated into additional hires largely because of the headwinds businesses are facing with tariffs, geopolitical events,” she said, adding that it’s a “foggy horizon” for businesses.
The outlook is looking cloudy for workers as well. Annual wage growth slipped to 3.5%, the lowest in more than four years.
“That will further impact consumer spending,” Bachaud said.
Tuesday’s data also confirmed an underlying deterioration in employment conditions, particularly for those who are younger or are minorities, noted Brian Bethune, an economics professor at Boston College.
The unemployment rate for Black workers rose to 8.3% in November, the highest in four years.
“The adverse distributional consequences of the tariff policies, both in terms of differential impact on small and medium enterprises, and across certain demographic groups, has accelerated in recent months,” he wrote.
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CNN’s Matt Egan contributed to this report.
