A long-delayed jobs report landed with a thud on Tuesday. After a record-long government shutdown delayed crucial Labor Department data for most of the fall, investors and policymakers finally got their first consolidated look at how the U.S. jobs market has been behaving beneath the surface. The timing was already awkward, with corporate announcements and private indicators increasingly pointing to accelerating layoffs — particularly among white-collar workers — even as official unemployment figures had remained relatively sedate.
Now new data suggests that calm may finally be giving way to clear and open turmoil. Employers added just 64,000 jobs in November, far weaker than recent monthly averages, while the unemployment rate rose to 4.6%, its highest level since September 2021. Wage growth slowed notably, too, rising 3.5% from a year earlier — the weakest pace since before the pandemic.
Because of the shutdown, the report is both late and unusually complex. It includes November data alongside belated October figures and revisions to earlier months.
Those revisions further darken the picture. August payrolls were revised to a total loss of 26,000 jobs. Revisions across late summer and fall subtracted a total of 33,000 positions.
One major (and perhaps obvious) drag came from federal employment. Government payrolls fell as longtime workers who had accepted deferred resignation offers earlier this year officially came off payrolls, contributing to a loss of roughly 100,000 federal jobs since September. Manufacturing also lost jobs in November, while gains remained concentrated in healthcare and service sectors — less discretionary categories that tend to remain immune to economic swings because demand is relatively inelastic.
Even so, the new headline numbers may still understate the strain in parts of the labor market. Challenger, Gray & Christmas last week reported more than 71,000 job cuts in November — the highest November total in three years — with hiring falling to its lowest level in 15 years. Major employers from Verizon to Amazon and even McKinsey have announced or signaled further layoffs, with many of those layoffs tied explicitly to automation and AI adoption across administrative and similar functions.
Such layoffs can take longer to show up in official unemployment data, because workers receive severance and so may delay going back on the job market. That lag is in part what Federal Reserve Chair Jerome Powell warned about last week when he said flaws in the Bureau of Labor Statistics’ “birth-death” model may be overstating job creation by a whopping 60,000 jobs a month.
The backdrop for stocks may be clearer than for individual workers, or even the U.S. government.
Signs of labor market deterioration have the potential to push stocks higher by strengthening the Federal Reserve’s case for additional interest rate cuts in 2026. The Fed has already made three such cuts this year, operating from a view that downside risks to employment increasingly outweigh inflation concerns. Tuesday's data underlines precisely those labor-market concerns, which could clear the way for further rate cuts.
At the same, the new data complicates President Donald Trump’s repeated assurances that the economy is in good shape, that inflation is low or nonexistent, and that labor market concerns are overblown.
But more than anything, this jumbo delayed report serves as a cold reality check. It suggests official data may finally be catching up to a slowdown that many workers and employers already know themselves to be living through.