U.S. Labor Market Continues to Cool Despite Modest Job Gains in November
The U.S. economy added 64,000 jobs in November, modestly outperforming expectations of 45,000, according to the latest data from the Bureau of Labor Statistics (BLS). Despite the positive surprise, the broader labor market showed continued signs of softening, as the unemployment rate rose to 4.6%, up from 4.4% in October — the highest level since September 2021.
Compounding concerns, the BLS revised October’s payroll numbers sharply downward by 105,000 jobs, primarily due to adjustments related to the federal government’s deferred-resignation program.
Job growth remained uneven across industries. The health care sector led with 46,000 new positions, followed by construction, which added 28,000 jobs. However, declines were reported in several cyclical sectors, including manufacturing and transportation and warehousing, indicating ongoing areas of weakness in the job market.
Revisions to previous months further clouded the employment outlook, with August’s figures now reflecting a loss of 26,000 jobs. In total, late-summer and fall revisions resulted in a net decrease of 33,000 previously reported positions.
These developments align with messaging from the Federal Reserve’s December Federal Open Market Committee (FOMC) meeting, where Chair Jerome Powell struck a notably dovish tone. Powell cited growing risks to employment and acknowledged the Fed’s view that nonfarm payrolls have been consistently overstated by approximately 60,000 jobs per month — a trend yet to be corrected in official data.
While layoffs and new hiring remain subdued by historical standards, Powell emphasized that labor demand has “clearly softened,” reinforcing expectations of a continued cooling in the labor market as the U.S. heads into 2026.
