The headline:
The economy added 64,000 jobs in November and the unemployment rate rose to 4.6%, the Bureau of Labor Statistics said Tuesday in a report that was delayed by the 43-day government shutdown.
Forecasters had expected roughly 45,000 new jobs and for the unemployment rate to hold at 4.4%.
The October jobs report was canceled because of the government shutdown, so this latest report for November offers some key insights on the labor market.
The underlying reality
Tuesday’s report showed that employment growth has slowed to a point that might raise fears about unemployment.
It is helpful to look at the overall trend for the labor market. With revisions to the numbers for July and August and a decline in employment in October, the three-month moving average of job gains was 22,000 in November. That is below the rate needed to keep up with population growth.
Roughly 112,000 new payroll jobs are needed each month to keep unemployment from rising – the “breakeven rate” of job growth – according to one estimate from the Federal Reserve Bank of Atlanta.
But that figure is highly uncertain, thanks to the Trump administration’s crackdown on illegal immigration. The breakeven rate might be closer to zero if net migration has stalled, and it might even be negative if more people are leaving the country than entering.
Prime-age employment, relative to the overall population, is strong by historical standards. It dipped very slightly in November.
Recession watch
The unemployment rate, taken from the jobs report’s household survey, is still low by historical standards, but it is rising. It rose a tenth of a percentage point to 4.6% in November.
Recessions entail a rising unemployment rate.
Tuesday’s data suggests that the U.S. labor market is coming closer to triggering one major recession indicator — namely, when the three-month moving average of the unemployment rate rises half a percentage point relative to its minimum point over the past year. This indicator, known as the Sahm Rule, had signaled the start of all post-war recessions.
The indicator had been triggered in mid-2024, but is no longer signaling a recession.
This story is breaking and will be updated.
