Total nonfarm payroll employment rose by 227,000 in November—higher than expectations—and the unemployment rate changed little at 4.2%, the U.S. Bureau of Labor Statistics reported December 6. Employment trended up in healthcare, leisure and hospitality, government and social assistance. Retail trade lost jobs.
The latest report may or may not prompt the Federal Reserve to lower its key interest rate at its next meeting.
This release presents statistics from two monthly surveys. The household survey measures labor force status, including unemployment, by demographic characteristics. The establishment survey measures nonfarm employment, hours and earnings by industry.
“Today’s jobs report is particularly important as we head toward this month’s Federal Reserve meeting where another interest rate cut is on the table,” said Bright MLS Chief Economist Lisa Sturtevant in a statement. “The Fed also will be watching next week’s inflation report.
The report shows a strong labor market, but the employment picture has been a little bumpy over the past few months, as weather events and large labor strikes have complicated the outlook. There have been signs that the labor market was cooling some, which could give the Fed confidence to go ahead with another rate cut this month. However, the calculus could change if next week’s CPI report shows that inflation trends continue to reverse.
“The uncertainty makes it hard to predict where interest rates will end the year. Mortgage rates have come down from their recent high over the past couple of weeks, but homebuyers are unlikely to see any substantial decrease in rates in the coming weeks, even if the Fed does decide to cut rates. At this point, mortgage rates in the mid-6s are probably the best prospective homebuyers can expect.”
Realtor.com® Chief Economist Danielle Hale added that “a healthy economy and labor market are likely to give the Fed the confidence to continue normalizing monetary policy later this month, and this bodes well for the housing market in the year ahead.”
“But despite an uptick in inventory from more sellers and new construction, homebuyers in 2025 are expected to continue to contend with tough affordability conditions as income growth and a fairly modest decline in mortgage rates usher in only a small drop in the share of income required to buy the typical for-sale home,” she continued.
“As a result, we expect home sales to eke out only a 1.5% gain in 2025. However, the policy wild card is an important one that could add or subtract from this baseline expectation, both directly and because of indirect effects on economic growth. Whether housing gets a Trump bump or not will depend on the specific details and timing of policies adopted by the new administration and Congress.”
And this from MBA SVP and Chief Economist Mike Fratantoni:
“The payroll gains continue to be concentrated in just a few sectors, government, healthcare, and leisure and hospitality. The rebound followed a net loss of private sector jobs in October with the impact of the hurricanes. Wage growth remained steady at 4% on an annual basis.
“Fed officials have pointed to their ‘data dependence’ when it comes to decisions about future rate cuts. These data support a cut at the December meeting, and MBA forecasts that the Fed will continue to reduce short-term rates in 2025, although they are likely to slow the pace of cuts.”
Household survey data
Both the unemployment rate, at 4.2%, and the number of unemployed people, at 7.1 million, changed little in November. These measures are higher than a year earlier, when the jobless rate was 3.7%, and the number of unemployed people was 6.3 million.
Among the major worker groups, the unemployment rate for Blacks (6.4%) edged up in November. The jobless rates for adult men (3.9%), adult women (3.9%), teenagers (13.2%), Whites (3.8%), Asians (3.8%) and Hispanics (5.3%) showed little or no change over the month.
The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 1.7 million in November. This measure is up from 1.2 million a year earlier. In November, the long-term unemployed accounted for 23.2% of all unemployed people.
The labor force participation rate, at 62.5%, changed little in November and has remained in a narrow range of 62.5% to 62.7% since December 2023. The employment-population ratio, at 59.8%, also changed little over the month but is down by 0.6%age point over the year.
The number of people employed part time for economic reasons changed little at 4.5 million in November. This measure is up from 4 million a year earlier. These individuals would have preferred full-time employment but were working part time because their hours had been reduced or they were unable to find full-time jobs.
The number of people not in the labor force who currently want a job, at 5.5 million, changed little in November. These individuals were not counted as unemployed because they were not actively looking for work during the four weeks preceding the survey or were unavailable to take a job.
Among those not in the labor force who wanted a job, the number of people marginally attached to the labor force, at 1.6 million, was unchanged in November. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the four weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, changed little at 396,000 in November.
Establishment survey data
Payroll employment had increased by an average of 186,000 per month over the 12 months prior to November. Over the month, employment trended up in healthcare, leisure and hospitality, government, and social assistance. Employment increased in transportation equipment manufacturing, reflecting the return of workers who were on strike.
Healthcare added 54,000 jobs in November, in line with the average monthly gain of 59,000 over the prior 12 months. In November, ambulatory healthcare services added 22,000 jobs, led by a gain of 16,000 in home healthcare services. Employment also increased in hospitals (+19,000) and nursing and residential care facilities (+12,000).
Employment in leisure and hospitality trended up in November (+53,000), following little change in the prior month (+2,000). Over the month, employment trended up in food services and drinking places (+29,000). Leisure and hospitality had added an average of 21,000 jobs per month over the prior 12 months.
In November, government employment continued to trend up (+33,000), in line with the average monthly gain over the prior 12 months (+41,000). Over the month, employment continued to trend up in state government (+20,000).
Employment increased by 32,000 in transportation equipment manufacturing in November, reflecting the return of workers who were on strike.
Employment in social assistance edged up by 19,000 in November, similar to the average monthly gain of 18,000 over the prior 12 months. Over the month, individual and family services added 17,000 jobs.
Retail trade lost 28,000 jobs in November, after showing little net employment change over the prior 12 months. In November, employment declined in general merchandise retailers (-15,000), while electronics and appliance retailers added jobs (+4,000).
Employment showed little or no change over the month in other major industries, including mining, quarrying and oil and gas extraction; construction; wholesale trade; transportation and warehousing; information; financial activities; professional and business services; and other services.
In November, average hourly earnings for all employees on private nonfarm payrolls rose by 13 cents, or 0.4%, to $35.61. Over the past 12 months, average hourly earnings have increased by 4%. In November, average hourly earnings of private-sector production and nonsupervisory employees rose by 9 cents, or 0.3%, to $30.57.
The average workweek for all employees on private nonfarm payrolls edged up by 0.1 hour to 34.3 hours in November. In manufacturing, the average workweek was little changed at 40 hours, and overtime edged up by 0.1 hour to 2.9 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls remained at 33.7 hours.
The change in total nonfarm payroll employment for September was revised up by 32,000, from +223,000 to +255,000, and the change for October was revised up by 24,000, from +12,000 to +36,000. With these revisions, employment in September and October combined is 56,000 higher than previously reported.
