October job losses show hit from government shutdown and DOGE cuts
Natalie Sherman
New York business reporter
Analysts had been bracing for a hit to the job market from the government shutdown and Trump's push to cut government jobs earlier this year as part of the drive by the Department of Government Efficiency (DOGE) .
This report shows exactly that - the economy shedding more than 100,000 jobs in October, driven by a loss of 162,000 positions in the federal government.
Many of the workers cut by DOGE in the spring did not formally fall off the payrolls until October.
Overall, since April, the US economy has added only about 119,000 jobs, according to this report. Meanwhile, federal government employment has fallen by 271,000 since January.
Data shows hourly pay has increased
While the data shows the unemployment rate has risen, it also shows an increase in hourly pay.
Average hourly earnings for all employees on private payrolls (not including farms) edged up by five cents, to $36.86, it says.
Over the past year, wages have increased 3.5% overall. The length of the average workweek also increased slightly by 0.1 hour, it says.
Unemployment rises as hiring remains sluggish, figures show
Natalie Sherman
New York business reporter
The unemployment rate in the US ticked up to 4.6% last month - up from 4.4% in September - as hiring remained slow, the Labor Department says.
Employers added 64,000 jobs in November, according to the report. That was a bit more than expected, but the agency also says that there were fewer jobs added in September and August than it had initially estimated.
'A noisy and volatile report expected' - economist
Danielle Kaye
New York business reporter
The weeks-long government shutdown may not have had much of an effect on payroll numbers, economists say.
Workers who were furloughed during the shutdown were counted as employed in the Labor Department’s survey of businesses.
But Lydia Boussour, senior economist at EY-Parthenon, notes that a sweeping federal workforce restructuring could muddy the numbers.
Tens of thousands of federal workers were expected to fall off payrolls in October after accepting deferred buyouts earlier this year, as part of President Trump’s efforts to shrink the size of the federal government.
"Although combining two months of payroll data might seem to offer greater clarity, the absence of October’s household survey and several one-off factors will leave the report noisy and volatile," Boussour says.
For the Fed, the jobs data comes at a tricky juncture
Danielle Kaye
New York business reporter
Last week, the Federal Reserve lowered interest rates for the third time this year - but the decision was not unanimous. Internal divisions are creating uncertainty about additional cuts in the coming months.
A lot could depend on incoming data on the jobs market and inflation.
Policymakers disagree about how the US central bank should balance competing priorities: a weakening job market on the one hand, and rising prices on the other. The Fed typically cuts interest rates when it thinks the job market needs a boost and raises them when it thinks prices are rising too quickly.
Fed chair Jerome Powell said last week that central bankers needed time to see how the Fed's three cuts this year work their way through the US economy, adding that they will closely examine new data ahead of the Fed's next meeting in January.
“We are well-positioned to wait to see how the economy evolves," Powell told reporters.
The Fed is facing a "very challenging situation" as it confronts risks of rising inflation and unemployment, Powell said, adding: "You can't do two things at once". He warned that jobs data could be overestimating hiring.
Wall Street investors will also be monitoring today’s jobs numbers for signs of how they might influence future interest rate decisions.
“As long as the numbers don’t suggest employment is falling off a cliff, the markets may embrace soft data because it could lead to a more-dovish Fed,” says Chris Larkin, managing director of trading and investing at E*TRADE from Morgan Stanley.
Economists largely expect the numbers to reinforce cooling labour market narrative
Danielle Kaye
New York business reporter
For months, there have been mounting signs of weakness in the US job market. Job growth has barely budged since April, despite a surprising pick-up in hiring in September.
Economists largely expect today’s numbers to reinforce the narrative of a cooling labour market - though to what extent remains unclear. Employers likely added 50,000 jobs in November, and the unemployment rate is expected to have held steady at 4.4%, according to FactSet.
Some have pointed to private data sources as evidence of a recent contraction in the labour market, no matter what the Labor Department’s delayed report shows today. The private ADP National Employment Report estimated that private employers shed 32,000 in November.
“Hiring has been choppy of late as employers weather cautious consumers and an uncertain macroeconomic environment,” Nela Richardson, ADP’s chief economist, said in a statement.
What data is the Labor Department releasing?
Danielle Kaye
New York business reporter
The Bureau of Labor Statistics is set to release long-awaited data that should help shed light on the state of the US jobs market in November - and, partially, in October.
The monthly jobs report usually comes out on the first Friday of each month. But the 43-day federal government shutdown, which lasted through mid-November, left statistical agencies understaffed, forcing data collection to grind to a halt.
Because of the fallout from the shutdown, the Labor Department postponed the November jobs report by more than a week. That delay has left economists, investors and central bankers anxiously awaiting today’s numbers.
There’s another wrinkle in today’s unusual release - the Labor Department is set to unveil partial labour market data from October alongside the full November report.
The monthly employment report is informed by two separate surveys, one of households and the other of businesses. The household survey for October was scrapped altogether due to the government shutdown, meaning the government will not report an unemployment rate for that month. But hiring numbers from employers were still collected electronically in October and will also be released today, the department says.
