U.S. job growth slowed sharply this fall, indicating a labor market that’s losing momentum. Nonfarm payrolls rose by 64,000 in November, a little bit better than expected, but an abbreviated October report showed a steep loss of 105,000 jobs following revisions tied to the recent government shutdown.
The unemployment rate climbed to 4.6%, its highest level since 2021, while a broader measure of underemployment rose to 8.7%. The data points to a familiar pattern: low hiring, low firing, and growing strain beneath the surface. Health care once again did most of the heavy lifting, adding 46,000 jobs in November, while construction also posted gains. Government payrolls, however, fell sharply in October as delayed layoffs took effect, and sectors like transportation, warehousing, and leisure continued to shed jobs.
Economists note the U.S. has added only about 100,000 jobs over the past six months, a pace some describe as a “jobs recession.” Meanwhile, wages and inflation pressures remain muted, complicating the Federal Reserve’s next move. The Fed has already cut interest rates three times since September but has signaled a higher bar for further reductions, especially with inflation still above target and recent data distorted by shutdown-related delays.
Markets and policymakers are now looking ahead for clarity; investors see low odds of another rate cut in January, betting the Fed will wait for cleaner data early next year. For now, the picture is one of an economy still growing, but increasingly reliant on a narrow set of job creators.
