November Jobs Report: Jobs Flatline as Unemployment Rises
November Jobs Report: Jobs Flatline as Unemployment Rises
The November Employment Report underscores a stagnant labor market, with the economy adding a net of only 64,000 jobs. Uncertainty around tariffs and geopolitical tensions is blocking interest rate cuts from being able to move through the economy to loosen business decisions. As a result, hiring remains subdued and stagnation remains the dominant storyline in today’s labor market.
Sectoral Weakness and Key Drivers
Job growth was entirely concentrated in Healthcare and Social Assistance, which alone accounted for all 64,000 net positions.
Construction also showed resilience, adding 28,000 jobs, as skilled trades continue to show strong signs of demand.
However, key consumer-facing sectors saw contraction: Leisure and Hospitality and Transportation and Warehousing reported negative job growth, reflecting how escalating price pressures—largely driven by tariffs—continue to restrict consumer spending and business expansion.
Rising Unemployment and The Hiring Challenge
The unemployment rate rose to 4.6%, exceeding market expectations, as the job-to-hire conversion remains weak. The surge in job openings reported in October appears to have been a false indicator of hiring momentum.
The total number of unemployed individuals has increased by over 700,000 in the past year.
Crucially, the rise in re-entrants (those returning to the labor force) is outpacing all other categories of the unemployed (up 20% in the past year). This demographic trend is a positive counter-signal against structural headwinds—namely an aging population and lower immigration—suggesting a potential rebalancing of the labor force as more working-age individuals seek employment.
The Crisis of Long-Term Unemployment
The primary challenge remains in hiring the available talent, particularly the long-term unemployed.
The number of individuals unemployed for 27 weeks or more (which constitutes 24.3% of the unemployed) has risen by 15.5% over the past year.
This increase signifies that for a growing segment of the population, unemployment is transforming from a temporary, transitory state into a protracted state of being.
Some workers are leaving the labor force entirely - with the numbers of marginally attached (16.1%) and discouraged (62.3%) workers rising over the last year.
Wage Growth Slows
Wage growth has slowed over the past year, with average hourly earnings now at 3.5% annual growth.
Wage growth has remained above inflation for over two years, but the gap between has been closing.
Wage growth is expected to converge with inflation in the coming months, leaving workers with less wiggle room in their budgets.