Unemployment rises to four-year high as November payrolls show limited improvement

WASHINGTON — The U.S. unemployment rate rose to 4.6% in November, the highest level since September 2021, as the labor market showed signs of cooling after a 43‑day government shutdown disrupted data collection. The Bureau of Labor Statistics reported that the economy lost 105,000 jobs in October and added about 64,000 in November, a net gain that nevertheless left payrolls substantially short of pre-shutdown levels. Average hourly earnings were up 3.5% from a year earlier in November, even as overall inflation remained around 3% in September, marking the slowest wage growth pace in years. Financial markets reacted with a muted mix: the Nasdaq edged higher, the S&P 500 slipped slightly, and the Dow moved little, as traders weighed the pace of the economy against policy expectations.

Analysts noted that the data underscored a bifurcated economy. Wealthier households appeared better positioned as overall conditions improved for some workers, while lower-income households faced continued pressures such as elevated rents and rising delinquencies. On the manufacturing front, the report showed persistent weakness: 5,000 manufacturing jobs were shed in November after a 9,000‑job decline in October. The White House has repeatedly highlighted a manufacturing revival as a policy priority, using the sector’s performance to justify its broader approach to trade and regulation. The unemployment rate among younger workers also moved higher: 16.3% for those aged 16 to 19 in November, up from 13.2% in September. The overall 16- to 24-year-old rate rose to 10.6% in November, the highest since 2021, while unemployment for 20- to 24-year-olds eased slightly to 8.3% from 9.2% in September, though the figure remained above 2021 levels.

The notes recount a dramatic pullback in federal payrolls, with the administration attributing much of the decline to a broad efficiency push. Elon Musk’s so‑called Department of Government Efficiency (DOGE) was cited as helping reduce the federal workforce by hundreds of thousands of positions since January, a shift Secretary of Labor Lori Chavez-DeRemer framed as a deliberate step toward trimming government overhead. In her view, the November payrolls signal momentum in the private sector despite the October losses and ongoing wage moderation. The White House also highlighted the gains in private payrolls, with 64,000 jobs added in November, and issued a message of optimism about continued private-sector hiring.

Beyond the labor market, retail sales data published by the Census Bureau pointed to a deceleration heading into the holiday season. Sales flattened after a 0.1% uptick in September, marking the weakest monthly reading since May and underscoring a consumer backdrop that remained fragile as shoppers balanced price pressures with expectations of a busy shopping period. Nevertheless, retail activity around Thanksgiving painted a more nuanced picture: the National Retail Federation reported a record 202.9 million shoppers over the five-day weekend, up from 197 million a year earlier, suggesting that consumer engagement remained high even as broader sentiment soured.

The November snapshot has amplified the policy debate surrounding President Trump’s economic agenda. Democrats seized on the figures as evidence that tariff policies, federal austerity measures, and broader fiscal restraint may have contributed to a softer labor market, while Republicans and administration supporters emphasized the resilience of private-sector hiring and signs of wage growth that could translate into consumer spending. DNC spokespeople argued that working families confront rising prices and job uncertainty, tying the data to concerns about affordability in areas ranging from groceries to housing. Secretary Chavez-DeRemer, by contrast, framed the report as evidence of continued momentum and a recovery in private-sector employment, insisting that the economy was moving forward despite a difficult October baseline. The White House, for its part, celebrated the data on social media and in official statements as proof that “the best is yet to come” under the administration’s approach.

Looking ahead, economists cautioned that the uneven trajectory complicates the path for the administration’s stimulus and trade policies. While the private sector showed pockets of strength, the drag from manufacturing and youth unemployment, coupled with easing wage gains, suggested a slower continuation of the payroll expansion in the near term. Analysts will be watching upcoming reports for clues about whether November’s modest private-sector gains can translate into broader, sustained hiring improvements or whether further policy adjustments will be required to support workers facing affordability pressures. In the meantime, retailers and consumers alike appear to be navigating a volatile mix of prices, wages, and expectations as the holiday season unfolds, underscoring the centrality of the labor market to the broader economic outlook.

Source: Time – All