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.