What we covered here:
• The US economy lost 105,000 jobs in October and added 64,000 jobs in November, the Bureau of Labor Statistics reported Tuesday. The unemployment rate rose to a four-year high of 4.6% last month.
• Almost all economic reports from the Bureau of Labor Statistics and the Census Bureau have been delayed due to the historically long federal shutdown, which hamstrung data collection.
• The October report now marks the first time in almost eight decades that a monthly snapshot has not included the unemployment rate.
• The Census Bureau also reported October retail sales remained flat, the lowest reading in five months.
Our live coverage of the latest jobs report and economic data has ended. Read more here.
White House touts 'native-born' job gains. It's not that simple
The White House on Tuesday touted the latest employment figures as a sign of a “strong, American First economy,” highlighting gains in the private sector.
“Since President (Donald) Trump took office, 100% of the job growth has come in the private sector and among native-born Americans — exactly where it should be,” White House press secretary Karoline Leavitt wrote Tuesday.
Private-sector businesses have indeed driven job growth this year while public sector employment has declined – entirely because of steep federal workforce cuts by the Trump administration. From January through November, the US economy added 499,000 jobs: The private sector added 687,000 jobs and the government (federal, state and local) shed 188,000 jobs.
However, the pace of job growth has fallen off: The year-to-date employment gains – overall and private-sector – are the weakest since 2020 and, before that, the Great Recession.
Additionally, it’s impossible to attribute the monthly employment gains reported widely from the jobs report to any particular nativity or documentations status – labor force and demographic statistics are drawn from an entirely different survey than the monthly payroll numbers.
Also, the White House is relying on datasets – employment levels for native-born and foreign-born workers – that are not designed for those estimations, economists such as Jed Kolko have noted.
The estimated nativity numbers are drawn entirely from responses to a survey with a small sample size. Additionally, the broader employment levels are adjusted annually to align with Census population estimates; as such, the resulting numbers have to add up to the predetermined population controls, he noted in an August post on the topic.
How AI is impacting the job market
One of the biggest economic stories has been major advancements in artificial intelligence.
On the one hand, they have made workers a lot more productive.
But at the same time, they’ve reduced the need to hire as many workers, especially entry-level ones. This was a major theme in the Federal Reserve’s November Beige Book, a compilation of anecdotes from businesses collected by the 12 regional Fed banks.
“Several manufacturers mentioned using AI tools and automation technologies to enhance worker productivity, which enabled one to reduce its office staff by 15%,” the Cleveland Fed noted.
“Many contacts noted that even modest deployments of AI would enable them to not refill some jobs or to skip a recruiting class of entry-level workers,” the Philadelphia Fed wrote.
Some of the biggest layoff announcements this year have cited AI. That includes Amazon’s 14,000 cuts and Verizon’s 13,000 cuts.
Here's why the unemployment rate rose last month
The jobless rate in November hit 4.6%, setting a fresh four-year high in the process; however, the increase was less due to a spike in layoffs and more a reflection of the “low-hire, low-fire” slog that the US labor market has been in for months.
The unemployment rate rose because growth in the overall labor force (which includes those who have jobs as well as those looking for work) outpaced growth in the household survey’s measure of employment.
The jump in people re-entering the workforce also drove the labor force participation rate a tick higher. The number of people who reported permanently losing their jobs fell.
There are some shutdown effects to be considered: Since the Bureau of Labor Statistics was without October household survey data, the November estimates had “slightly higher than usual” standard errors because of lower response rates, weighting changes and the use of a two-month analysis versus one month.
“As such, we are careful in putting significant weight on November’s number, but the upward trend jibes with other data such as continuing jobless claims, the Conference Board’s labor differential and the quit rate, that all point to the jobs market continuing to weaken,” Wells Fargo economists wrote in a note to investors on Tuesday.
Stocks slide as Wall Street digests jobs data
US stocks were lower Tuesday afternoon after long-delayed jobs data showed a labor market that is struggling to maintain momentum.
The Dow fell 421 points, or 0.87%. The broader S&P 500 fell 0.75%, and the tech-heavy Nasdaq Composite fell 0.5%. Stocks wavered in the morning and extended their losses in the afternoon.
“Job growth is holding on, but cracks are forming,” Gina Bolvin, president of Bolvin Wealth Management Group, said in an email. “Consumers are still standing, but not sprinting.”
While this morning’s jobs data stoked fresh uncertainty about the health of the economy, investors are also grappling with nerves about artificial intelligence. The Nasdaq is set for its fourth day of losses in a row as concerns persist about tech companies’ valuations and enormous spending plans.
Meanwhile, energy and oil stocks led the S&P 500 lower as oil prices tumbled to their lowest level since 2021. Chevron (CVX) fell 2%. Phillips 66 (PSX) sank 5.5%.
Treasury yields ticked lower as investors bought bonds. The US dollar slightly weakened against other major currencies and hovered near its lowest level in two months.
The S&P 500 hit a record high on December 11 and has since stumbled in recent trading sessions. The index is down roughly 2% since its record high, but still up 15% this year, putting it on track for a year of relatively strong gains.
“Investors should be more selective than aggressive as momentum wanes near highs,” Craig Johnson, chief market technician at Piper Sandler, said in a note.
Oil prices tumble to 4.5-year lows
The already-hurting oil market took another hit Tuesday as energy traders brace for a potential Russia-Ukraine deal that worsens the supply glut.
US crude oil dropped 2.5% to $55.40 a barrel, leaving it on track to finish at the lowest level since February 2021.
Brent crude, the world benchmark, is also on pace to settle at a fresh four-and-a-half year low below $60 a barrel.
The sell-off comes after President Donald Trump said Monday night “we’re closer now than we have been, ever” to ending the Ukraine war.
Although key sticking points remain, an agreement to ending the war could allow Russian oil sidelined by sanctions to return to the global market.
“The market is afraid of free-flowing Russian energy,” Robert Yawger, executive director and commodity specialist at Mizuho Securities, told CNN in a phone interview. “It’s looking grim. We already have a way oversupplied market. Now we are looking at something that could get to the point of ridiculous.”
Andy Lipow, president of Lipow Oil Associates, said that if oil prices keep falling, OPEC+ may reverse course and start pulling back the producer group’s recent supply increases.
Cheap oil is providing a bright spot on the affordability front for consumers.
The national average price of regular gasoline has dropped to $2.91 a gallon this week, the lowest price since May 2021, according to AAA.
GasBuddy expects gas prices on Christmas Day to drop to $2.79 a gallon, the lowest since 2020.
How the shutdown affected Tuesday's jobs data
The longest-ever federal shutdown cast a large shadow over the November jobs report: Statistical agencies went dark during that time and critical data couldn’t be collected, leading to a situation where the Bureau of Labor Statistics delivered 1.5 jobs reports on a mid-December Tuesday morning.
So how much did the shutdown skew the months’ data? In detailed technical notes pockmarking Tuesday’s release, BLS officials went into great detail about the known and unknown effects.
But first, a quick refresher: 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. (The data from the latter survey was scrapped for October)
Back to the potential effects – 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.
BLS officials also noted that the overall payroll numbers for October and November weren’t influenced by the hundreds of thousands of furloughed federal workers. Those workers were eventually paid, so they were counted as employed for both months.
Rather, October’s hefty job losses (the economy shed 105,000 jobs that month) were the result of another, separate – and months-old – action by the federal government. The negative total was driven by the deferred resignations taken earlier in the year that were effective as of September 30.
Here's what Wall Street is saying about the jobs data
Wall Street is parsing through the partial jobs data for October and full report for November, in addition to data on retail sales.
US stocks were lower Tuesday morning. The Dow was down 220 points, or 0.45%. The S&P 500 slid 0.5%. The tech-heavy Nasdaq Composite fell 0.3%.
Here’s what strategists and economists are saying:
- “Investors should avoid overly extrapolating the signals from this exceptionally noisy employment report.” — Jason Pride, chief of investment strategy and research at Glenmede. “All else equal, today’s report likely strengthens the case for further easing on the margin. However, after delivering three rate cuts at the end of 2025, it is likely that the Fed will take a few months to digest incoming data before deciding on its next move.”
- “Wages are slowing and will make consumer income become a dominant theme in the new year.” — Jefferey Roach, chief economist at LPL Financial.
- “[November] job growth came in better than the consensus expectation, but not enough to give an all-clear sign as unemployment ticked up.” — Scott Helfstein, head of investment strategy at Global X. “This keeps another Fed cut for early next year on the table, which may help stabilize equity prices going into year end.”
- “We take a glass half full rather than a glass half empty view of the combined part-October, full November employment report and, more importantly, we think the Fed will too. Specifically we do not think this was weak enough to spur another near-term rate cut.” — Krishna Guha, vice chairman at Evercore ISI.
- “Equities continue to struggle to regain upside momentum as concerns about valuations and AI expectations continue to limit the bullish momentum.” — Daniela Hathorn, senior market analyst at Capital.com. “Meanwhile, the softer data continues to drag on yields and the US dollar.”
New revised figures paint worse picture of the job market
In addition to releasing delayed October and November employment figures, on Tuesday the Bureau of Labor Statistics published new, downwardly revised figures for September and August.
In August the number of net jobs shed was 26,000, a 22,000 increase from earlier figures. And in September the number of people hired was revised down by 11,000 to 108,000.
Each month’s initially reported change in employment is subject to multiple revisions as the government collects more data that enables more accurate estimates. The first two revisions occur in the subsequent job reports.
Collectively, the August and September revisions suggest the labor market is weaker than previously known.
What the Federal Reserve has said about the job market
Economists, business leaders and politicians have debated the best solution to make America’s cost-of-living feel affordable again, including increasing health care and housing subsidies and reducing tariffs.
But Federal Reserve Chair Jerome Powell says the solution is to pay people more money.
“We are going to need to have some years where real compensation is higher … for people to start feeling good about the affordability issue,” Powell said last week at a press conference after the Fed cut rates.
“We are trying to keep inflation under control, but also support the labor market and strong wages, so that people are earning enough money and feeling economically healthy again.”
The Fed hopes that by reducing interest rates, businesses will spend less to borrow money, freeing up more capital to spend on hiring. A better labor market would give Americans more choices in jobs, increasing the amount of pay companies would need to shell out to keep and attract workers.
If that keeps up, then over time, people will adjust to the higher prices, which will feel relatively affordable as their paychecks grow, Powell argued.
Of course, that’s easier said than done. Americans’ average hourly earnings grew at an annual rate of 3.5% in November, the slowest rate in over four years, according to Tuesday’s jobs report.
Read more here.
Kevin Hassett, one of Trump's top picks to lead the Fed, says there's "plenty of room" to cut rates
National Economic Council Director Kevin Hassett said Tuesday the Federal Reserve has “plenty of room” to lower rates.
“The reason they can be lower is not just mumbo jumbo,” he said in a CNBC interview. Rather, it’s because there’s an increase in demand for workers as a result of President Donald Trump’s policies, including corporate tax cuts, he said.
Hassett is one of Trump’s top picks to replace Fed Chair Jerome Powell when his term expires in May.
Hassett also said he spent an hour and a half meeting with Trump in the Oval Office on Monday. Trump has repeatedly expressed he wants interest rates to be much lower and would ideally like the next head of the Fed to consult with him before monetary policy meetings.
Hassett said he’d be open to hearing the president out. “If he’s got a good reason … and I found that I agreed with the reason, then I would present it to the others and see what they think,” Hassett said, referring to other members of the Fed’s rate-setting committee. But he said the central bank’s independence is still “really important.”
Unemployment rate rises for young workers
By all indications, the employment prospects for young workers remained grim in November, as the unemployment rate for 16-to-24 year olds rose to 10.6%, the highest since 2021, with more than 2 million young workers looking for jobs last month.
The unemployment rate for 16-to-19 year olds climbed to 16.3% in November from 13.2% in September, the highest level since August 2020, indicating that high school graduates trying to enter the workforce are facing mounting challenges, as many traditionally blue-collar sectors, like manufacturing and trucking, see job losses.
While the jobs picture for 20-to-24-year-olds improved slightly last month, falling from 9.2% in September to 8.3%, the reading was still the highest figure for the month of November since 2020, and it follows a pattern of increases, and worries about the effects of artificial intelligence on the entry-level job market persist.
In recent months, wage gains for young workers has come down rapidly, with workers between the ages of 16 and 24 seeing a yearly average wage growth of 6.0% in September, lower than at any other time in the past decade, including during the pandemic, according to the Federal Reserve Bank of Atlanta.
The job prospects for young workers and minorities have long been indicators of a weakening economy, a point that Fed Chair Jerome Powell has emphasized as the central bank lowers interest rates in an attempt to support a flagging labor market.
Job growth has fallen below this crucial level of stability
The US economy is failing to add enough jobs to keep up with the supply of new workers.
Job growth over the past three months slowed to an average of just 22,333 through November, according to Bureau of Labor Statistics data.
On a six-month basis, job growth is averaging just 16,666 per month.
This is shy of the breakeven rate of roughly 30,000 to 50,000 jobs that economists estimate is needed to keep the unemployment rate stable.
When job growth slips below the breakeven pace, it means job creation is not keeping up with the growth of the labor force as new workers enter or renter the job market.
This helps explain why the unemployment rate has climbed from 4.4% in September to a four-year high of 4.6% in November.
The breakeven rate of job growth has dropped significantly in recent years as a result of fewer immigrants and aging demographics marked by the retirement of baby boomers.
That means the US economy needs fewer jobs to keep the unemployment rate stable than it did a few years ago. And yet job growth has dropped below even that lowered bar.
US on track for worst year of job growth since 2020
Hiring is so weak that the US economy is on track for its worst year of job growth since Covid.
The economy has only added an average of 55,455 jobs per month through November, according to new data released Tuesday by the Bureau of Labor Statistics.
That leaves the job market on pace for its weakest year of job growth since 2020 during the pandemic. Beyond that, this would be the worst job growth since 2009 during the Great Recession.
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 latest jobs report “paints a sobering picture of a job market that may officially be turning frigid after a prolonged cooling period,” Laura Ullrich, director of economic research for the Indeed Hiring Lab, wrote in a note on Tuesday.
Ullrich noted that while the incomplete report may need an “asterisk attached to it” due to the shutdown and federal worker buyouts, the data shows “weak overall” job growth in November concentrated largely in health care.
Stocks waver after "muddled" jobs data
US stocks opened lower Tuesday as traders digested long-delayed data on the job market that showed the unemployment rate ticked up to 4.6% in November.
The Dow fell 32 points, or 0.07%. The S&P 500 fell 0.18%. The Nasdaq Composite slid 0.24%.
Stock futures had briefly inched higher after the data release before wavering and resuming trading lower.
Wall Street traders are keen for insight into whether the Federal Reserve will cut interest rates in January. However, the Fed is likely to put more weight on the December jobs report, set to be released early next month.
“This is a mixed bag for the Fed,” Thomas Simons, chief US economist at Jefferies, said in a note. “The combined message of all of this data is sufficiently muddled that it does not give a sense of whether broader downside risks to the labor market have intensified.”
“The picture will be somewhat clearer next month,” Simons said.
Traders are pricing in a roughly 24% chance that the Fed cuts rates in January, according to CME FedWatch. That’s unchanged from a 24% chance yesterday.
Elsewhere in markets:
- Treasury yields fluctuated and were little changed.
- The US dollar slightly weakened against other major currencies.
- The VIX, Wall Street’s fear gauge, was relatively flat.
The Fed is "unlikely to put much weight on today’s report"
Federal Reserve officials, who are actively trying to preserve the US labor market’s strength, probably weren’t too spooked by the latest batch of employment figures.
The Bureau of Labor Statistics on Tuesday reported that the US economy lost 104,000 jobs in October, recouping only about half of those losses in November. Meanwhile, the unemployment rate last month rose to a four-year high.
While the latest jobs report underscores a slowing labor market, it probably won’t sway what the Fed decides on interest rates at its policy meeting at the end of January.
The Fed earlier this month lowered rates for the third consecutive time, but signaled that further rate cuts in the near term are less likely and will be tougher to justify.
After lowering rates three times this year, policymakers likely want to see how those rate moves affect the US economy, meaning they may hold off on further rate cuts. Central bankers projected just one rate cut in 2026, according to their latest economic projections.
Fed officials will also have more employment data by their January 27-28 meeting
“The report on December’s employment data, released in early January ahead of the next meeting, will likely be a much more meaningful indicator for the Fed when it comes to deciding the near-term policy trajectory,” Haigh said.
Where the jobs are
The November jobs report showed employers hired 64,000 new workers that month, exceeding economists’ expectations for 40,000 hires.
This came after the economy lost 105,000 workers in October, according to data released Tuesday by the Bureau of Labor Statistics.
“The nation has added a mere 100,000 jobs in the past six months,” said Heather Long, chief economist at Navy Federal Credit Union, in a note Tuesday. “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.”
Here’s a closer look, sector by sector:
Wages grew in November at slowest pace in more than four years
While Americans’ earnings are still outpacing inflation, they’re growing at the slowest rate in over four years, according to new data released Tuesday in the delayed November jobs report.
Americans’ average hourly earnings grew at an annual rate of 3.5% in November, whereas inflation grew at a 3% rate in September. The wedge between the two has significantly narrowed as inflation has been reaccelerating and the labor market has tightened, prompting employers to dole out less generous raises and starting salaries.
The last time average annual wage growth was this slow was May 2021, when that rate clocked in at 2.3%.
There are now 7.8 million Americans without a job
Tuesday’s jobs data “is nothing but bad, bad news for the economy and the outlook in 2026,” said Chris Rupkey, chief economist at FwdBonds.
The November increase in the unemployment rate shows there are “no jobs out there for American workers that have been laid off,” he said in a note Tuesday.
There are now 7.8 million Americans out of work, he wrote, citing President Donald Trump’s clampdown on foreign labor.
“It stands to reason that if you deport workers from the country there will be fewer jobs showing up in the labor statistics and more unemployment, and that is exactly what we are seeing,” Rupkey wrote.
US retail sales were flat in October — the weakest in five months
Sales at US retailers were flat in October, in a sign that America’s economic engine is sputtering.
Retail sales were unchanged in October from the prior month, the Commerce Department said Tuesday, down from September’s 0.1% increase. That’s the weakest monthly reading since May, when retail sales declined.
The October figure was roughly in line with the 0.05% gain economists predicted in a poll by data firm FactSet. The figures are adjusted for seasonal swings but not inflation.
Retail sales overall were pulled down by falling sales at car dealerships and gas stations; so, excluding those purchases, retail sales were up 0.5% in October. Sales also declined at home improvement stores, restaurants, bars and personal care shops.
Tuesday’s report was originally due in mid-November, but was delayed for a month because of the government shutdown.
While spending has been on the weaker side, Americans haven’t cut back outright in the face of low consumer sentiment and higher inflation spurred by President Donald Trump’s widespread tariffs. That should keep economic growth afloat for now: Consumer spending accounts for about two-thirds of the US economy.
In October, retail sales were up in the majority of categories tracked by the Commerce Department, rising the most at furniture stores (2.3%), sporting goods retailers (1.9%) and online (1.8%).
Still, the double whammy of a slowing labor market and higher tariff inflation poses a risk to consumer spending.
