United States nonfarm payrolls rose by more than expected in November, while October employment fell sharply and the unemployment rate climbed to its highest level in four years, according to delayed figures released by the Bureau of Labor Statistics (BLS) on Tuesday following the recent government shutdown.
Payrolls increased by a seasonally adjusted 64,000 in November, beating market expectations for a gain of 50,000 and rebounding from a revised decline of 105,000 in October.
Despite the improvement, the data pointed to continued softness in the U.S. labour market.
The unemployment rate also rose to 4.6%, exceeding the 4.4% expected, marking its highest level since September 2021.
A broader measure of unemployment that includes discouraged workers and those working part-time for economic reasons increased to 8.7%, the highest level since August 2021.
ANZ analysts commented in a note to clients: “Today’s data were consistent with our view that further easing from the Fed in 2026 is appropriate, and we continue to forecast 25bp cuts in both March and June.
"The unemployment rate is now at its highest level since early 2017, excluding the pandemic. While the labour market reports were soft, the data need to be treated with caution following the government shutdown, as noted by Fed Chair Powell at the December FOMC press conference.”
Alongside the November report, the BLS released an abbreviated October estimate showing payrolls fell by 105,000, driven by a steep fall in government employment, as deferred layoffs implemented earlier in the year took effect.
Government payrolls dropped by 162,000 in October, and fell by a further 6,000 in November.
October marked the third time in six months that payrolls recorded a net decline. The BLS also revised August employment down by 22,000 to show a deeper loss of 26,000, while September’s initial estimate was revised lower by 11,000.
The statistical agency cautioned that the household survey, which is used to calculate the unemployment rate, will continue to be affected for several months by disruptions caused by the shutdown.
Data collection challenges in October led to the cancellation of both the jobs report and the closely watched consumer price index release.
Despite these complications, the figures reinforced a familiar picture of a labour market characterised by low hiring and low firing.
Conditions have also been affected by stricter border policies under President Donald Trump, which have reduced the usual inflow of immigrant workers.
Sector-level data showed that most of the job gains in November came from healthcare, which added 46,000 positions and accounted for more than 70% of the total increase. Construction employment rose by 28,000, while social assistance added 18,000 jobs.
These gains were partly offset by losses elsewhere. Transportation and warehousing employment fell by 18,000, continuing a broader trend of job losses in the sector, while leisure and hospitality shed 12,000 positions.
Market expectations for another rate cut in January remained low. Following the jobs report, futures markets were pricing in about a 24.4% chance of a January reduction, unchanged from the previous session, according to the CME Group FedWatch tool.
The rise in the unemployment rate largely reflected an expanding labour force. Over the past two months, household employment increased by 407,000, though this was partly offset by a 323,000 rise in the labour force as the participation rate edged up to 62.5%.
In separate economic data released on Tuesday, the Commerce Department reported that U.S. retail sales were flat in September, compared with expectations for a 0.1% increase.
