Labor Market Cools Further Despite Slight Upside Surprise in November Jobs

The U.S. economy added 64,000 jobs in November, modestly outperforming expectations for 45,000 despite signs of broader labor market softening, according to data from the Bureau of Labor Statistics. The unemployment rate rose to 4.6%, ticking up from 4.4% in October and rising to its highest level since September 2021. Meanwhile, October payrolls were revised sharply lower by 105,000 jobs, largely due to the federal government’s deferred-resignation program.

Job creation remained uneven across sectors. Health care once again led gains with 46,000 new positions, while construction added 28,000 jobs. However, several cyclical industries, including manufacturing and transportation and warehousing, posted declines, pointing to ongoing pockets of weakness.

Revisions to late-summer and fall hiring further clouded the outlook, subtracting a net 33,000 jobs from prior estimates and shifting August’s figure to a 26,000-job loss.

The overall picture aligns with the Federal Reserve’s message at its December FOMC meeting, where Chair Jay Powell struck a notably dovish tone. Powell highlighted growing risks to employment and pointed to what policymakers believe is a persistent 60,000-per-month overcount in nonfarm payrolls that has not yet been corrected. While layoffs and hiring remain subdued by historical standards, Powell emphasized that labor demand has “clearly softened,” reinforcing expectations of a cooling labor market heading into 2026.

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Bureau of Labor Statistics

About Joe Palmisano

Joe Palmisano is Editorial Director for Connect Money, where he brings nearly three decades experience of market insights as a financial journalist, analyst and senior portfolio manager for leading financial publications, advisory firms, and hedge funds. In his role as Editorial Director, Joe is responsible for the selection of content and creation of daily business news covering the financial markets, including Alternative Assets, Direct Investment and Financial Advisory services. Before joining Connect Money, Joe was a financial journalist for the Wall Street Journal, regularly publishing feature stories and trend pieces on the foreign exchange, global fixed income and equity markets. Joe parlayed his experience as a financial journalist into roles as a Senior Research Analyst and Portfolio Manager, writing daily and weekly market analysis and managing a FX and US equity portfolio. Joe was also a contributing writer for industry magazines and publications, including SFO Magazine and the CMT Association. Joe earned a B.S.B.A. in Finance from The American University. He holds the Chartered Market Technician (CMT) designation and is a member of the CFA Institute.

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