The US labour market displayed contrasting trends for October and November amid reporting disruptions caused by a 43-day federal government shutdown. November saw an increase of 64,000 jobs, surpassing economists’ expectations of 40,000, while October recorded a loss of 105,000 positions. The unemployment rate climbed to 4.6%, marking the highest level since 2021.
Impact of Government Shutdown on Reporting
The prolonged federal shutdown delayed jobs data for September, October, and November. The September report was released on November 20, seven weeks late, while October and November figures were published together on December 16. October’s unemployment rate was not calculated due to incomplete data, complicating economic assessments for policymakers and businesses.
October Job Losses Driven by Federal Cuts
October’s decline largely stemmed from a reduction in federal employment, with approximately 162,000 federal workers exiting roles, many coinciding with the fiscal year-end on September 30. These cuts were linked to administrative cost-saving measures and significantly impacted the overall employment figures.
November Job Gains and Market Dynamics
In November, employment rebounded modestly, adding 64,000 positions and exceeding forecasts. Despite this gain, overall hiring momentum remains weak amid trade uncertainties and elevated borrowing costs. Companies continue to retain existing staff while exercising caution with new hires due to technological shifts and unpredictable tariff policies.
Federal Reserve Response
In response to slowing job growth, the Federal Reserve reduced its benchmark interest rate by 0.25 percentage points last week, marking the third cut in 2025. The decision saw three dissenting votes, the highest in six years, highlighting divisions within the Fed. Some officials support further easing to bolster employment, while others remain cautious due to inflation remaining above the 2% target.
Summary
The US labour market added 64,000 jobs in November after a loss of 105,000 in October, with the unemployment rate rising to 4.6%. October losses were primarily due to federal workforce cuts, while November gains indicate modest recovery amid economic uncertainty. The Federal Reserve has responded with interest rate cuts, reflecting mixed views on employment and inflation trends.
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