US Labor Market Stalls with Modest 64,000 Job Gain

US November Payrolls Rise 64,000, Unemployment Rate Edges Up to 4.6 The US labor market reported a modest 64,000 job gain in November, a far cry from the 300,000 jobs added in October. The unemployment rate edged up to 4.6 percent, a slight increase from the previous month's 4.5 percent. The Bureau of Labor Statistics' (BLS) report reflected the lingering impact of the longest government shutdown in US history, which lasted for 21 days and ended on November 19. The BLS data revealed that the labor market added 64,000 jobs in November, a significant decline from the 300,000 jobs added in October. The unemployment rate, which had been trending downward for several months, edged up to 4.6 percent, a slight increase from the previous month's 4.5 percent. The participation rate, which measures the percentage of the population that is either working or actively seeking work, remained steady at 62.3 percent. The financial markets reacted cautiously to the report, with the S&P 500 index falling for a third straight day. Treasury yields edged mildly down, with the 10-year yield declining to 3.85 percent. The implied probability of a Federal Reserve rate cut in January remained at 20 percent, with a reduction fully priced in by mid-2026. The US labor market has been experiencing a slowdown in recent months, with the average monthly job gain declining from 200,000 in 2023 to 100,000 in 2025. The slowdown has been attributed to various factors, including the government shutdown, a decline in consumer spending, and a rise in interest rates. The BLS report highlighted the impact of the government shutdown on the labor market. The shutdown resulted in the loss of 400,000 hours of work, with the majority of the lost hours coming from the private sector. The shutdown also led to a decline in the number of new hires, with the number of new hires declining by 15 percent in November compared to the previous month. The labor market's sluggish performance has significant implications for the US economy. A slowdown in the labor market can lead to a decline in consumer spending, which accounts for a significant portion of the US GDP. A decline in consumer spending can also lead to a decline in business investment, which can have a ripple effect on the overall economy. The Federal Reserve's monetary policy decisions will play a crucial role in shaping the US labor market's future outlook. The Fed has been raising interest rates to combat inflation, but a slowdown in the labor market may prompt the Fed to reconsider its monetary policy stance. A rate cut in January is still possible, but the probability remains low at 20 percent. In conclusion, the US labor market's modest job gain in November and the slight increase in the unemployment rate reflect the lingering impact of the government shutdown. The financial markets reacted cautiously to the report, with the S&P 500 index falling for a third straight day. The labor market's sluggish performance has significant implications for the US economy, and the Federal Reserve's monetary policy decisions will play a crucial role in shaping the labor market's future outlook.