US Employment Rebounds Unexpectedly in November After Sharp October Decline... Unemployment Rate Hits 4.6%, Highest in Four Years

Nonfarm Payrolls Increase by 64,000 in November
Rebound Follows Sharp Drop of 105,000 in October
Unemployment Rate Rises from 4.4% in September to 4.6% in November

Employment in the United States, which contracted sharply in October, rebounded more quickly than expected in November. However, the unemployment rate rose to 4.6%, the highest level since the COVID-19 pandemic in 2021, indicating that the labor market continues to slow.

A job posting is displayed at a retail store in Arlington Heights, Illinois, USA. Photo by AP Yonhap News.

According to the November employment report released on December 16 (local time) by the U.S. Bureau of Labor Statistics (BLS) under the Department of Labor, nonfarm payrolls increased by 64,000. This figure exceeded the Dow Jones consensus estimate of 45,000.

The nonfarm payrolls for October, also released that day, showed a decrease of 105,000. After a surge of 108,000 in September, employment plummeted in October before rebounding within a month. The sharp drop in October was largely due to workforce restructuring implemented by the Office of Personnel Management earlier this year, and the delayed inclusion of federal government retirements in the statistics. In fact, government employment decreased by 162,000 in October and by 6,000 in November.

The unemployment rate stood at 4.6% in November, surpassing both the September rate (4.4%) and market expectations (4.5%). This marks the highest level in four years and two months, since September 2021.

Wage growth also slowed. The average hourly wage increased by 0.1% from the previous month and by 3.5% from a year earlier, both lower than the October figures (0.4% and 3.7%, respectively). Notably, the year-over-year wage growth rate fell to its lowest level since May 2021.

Overall employment indicators are in line with the recent trend of a slowing labor market. Analysts attribute this to companies being cautious about new hiring amid increasing tariff policies and economic uncertainty.

According to the previously released Job Openings and Labor Turnover Survey (JOLTS) by the Department of Labor, the number of hires in October was 5,149,000, and the hiring rate was 3.2%, both down from September (5,367,000 hires and a 3.4% rate). The number of layoffs increased to 1,854,000 (layoff rate 1.2%), up from the previous month (1,781,000 and 1.1%), marking the highest level since early 2023.

Amid this weakening labor market, the Federal Reserve lowered its benchmark interest rate by 0.25 percentage points for the third consecutive time on December 10, setting the rate at 3.5-3.75% per annum. This decision prioritized concerns about employment slowdown over inflationary pressures. Fed Chair Jerome Powell stated at a press conference at the time, "Downside risks to the labor market are significant," and added, "The current economy is not in a phase where overheated employment is driving up prices."