The United States just saw a tick up in unemployment, to a four-year high of 4.6% in November. This increase represents a significant jump from 4.4% last month, which was the rate in September. Labor market report for November came out just after the 43-day federal government shutdown. Our report gave the first in-depth look at industry employment trends since the feds shut down the government in mid-November.
This doesn’t seem to have deterred employers from adding 64,000 jobs in November, more than most economists had predicted. Despite these positive trends, analysts pointed to indications of weakness in the job market, especially in more vulnerable sectors. The transportation and warehousing sector experienced some of the largest job losses, losing 18,000 jobs. On top of all that, manufacturing employment fell by 5,000 jobs over that span.
By contrast to these losses, the health care sector continued to grow steadily instead of in the last month, posting big gains of 46,000 jobs in November. Perhaps most remarkably, nursing and residential care facilities led this increase—combined with adding 11,000 jobs. These conflicting numbers further highlight the inconsistent state of today’s labor market.
The late timing of the report has already sparked concern among economic experts about what it means for future Federal Reserve policy decisions. Seema Shah, a major player and a major skeptic, stated the data shouldn’t be accepted at face value and shouldn’t be trusted at all.
“For a data-dependent Fed, this morning’s data will only increase the internal debate.” – Chris Zaccarelli
Job gains were larger than expected. As Ms. Shah explains, the growing joblessness is likely to raise some worry-laced questions in the Fed’s new secret lair. That would likely increase uncertainty about future monetary policy and prompt debate about possible increases in the fed funds target rate in coming months. Projections show that Federal Reserve officials mostly do not expect any more than a single rate cut by 2026.
This month’s November jobs report will be coming out soon. Policymakers are chomping at the bit to see what the recent economic conditions have wrought. The uncertain effects of the federal government shutdown had already put a heavy strain on multiple sectors and raised alarm about the overall health of the economy. As these experts point out, the positive job data doesn’t change the fact that serious structural vulnerabilities are lying in wait.