US unemployment rises further, hovering at highest since 2021
Source: AFP
The US jobless rate picked up again in November, hovering at its highest level in four years, official data showed Tuesday in a report underscoring a labor market cooldown in the world's biggest economy.
The report, delayed by a lengthy government shutdown, also indicated that the US economy lost 105,000 jobs in October.
Hiring picked up again in November with a gain of 64,000 jobs, but this was still a slower pace than before, according to the Labor Department figures.
"Employment rose in health care and construction in November, while (the) federal government continued to lose jobs," the department said.
There was a sharp decline of 162,000 government jobs in October, "as some federal employees who accepted a deferred resignation offer came off federal payrolls," the report added.
In November, unemployment climbed to 4.6 percent from 4.4 percent in September. It is the highest rate since September 2021.
There was no October jobless rate as officials were unable to retroactively collect data after the shutdown, which lasted until November 12.
The figures will be closely scrutinized for their potential bearing on US interest rates.
The Federal Reserve has cut rates three times in a row this year as employment weakened, but hinted that the bar is likely higher for further cuts.
A rapidly deteriorating jobs market could nudge the central bank to lower rates more to boost the economy, despite some policymakers' worries that higher inflation could become persistent.
While President Donald Trump's tariffs have not sparked a broad inflation surge, firms say they have caused business costs to grow and fueled uncertainty.
Trump's chief economic adviser Kevin Hassett told reporters Tuesday that government workers who took buyouts "are staying in the labor force and looking for work."
He said he expects "that they'll be very successful with it."
Americans 'squeezed'
Elizabeth Warren, the top Democrat on the Senate Banking Committee, slammed Trump's "chaotic tariffs" and economic policies, saying they were "hammering the labor market."
"With wages struggling to keep up with higher costs, it's no wonder Americans are more anxious about the economy than ever," she said.
In November, average hourly earnings climbed 0.1 percent to $36.86, while wages rose 3.5 percent on an annual basis. But both numbers represent a slowdown from the prior month.
In another sign that the economy appears to be cooling, a separate report released Tuesday by the Commerce Department said that retail sales were flat in October at $732.6 billion.
This came on the back of sales declines at motor vehicle and parts dealers, and gasoline stations. Consumers also pulled back at restaurants and bars.
"Americans are feeling squeezed," said Heather Long, chief economist at the Navy Federal Credit Union, adding that consumers were shifting to spending more on necessities.
Long-term unemployment
On employment, Long said: "The US economy is in a jobs recession. The nation has added a mere 100,000 in the past six months."
She said businesses were adjusting to tariffs, uncertain conditions and AI, and that most of the new jobs were in health care which is regularly hiring as the American population ages.
Economist Samuel Tombs of Pantheon Macroeconomics said much of the overall drag came from a slump in federal payrolls. The government shutdown likely also exacerbated unemployment figures.
But a growing proportion of people are jobless for longer periods.
The number of individuals unemployed for 27 weeks or more has risen by 15.5 percent over the past year, said Nicole Bachaud, labor economist at ZipRecruiter.
For now, economists say the jobs market is likely not weakening enough to trigger a January rate cut.
"While net hiring remains soft and narrowly based, it is not softening further and in fact is moderately firmer than the weak readings in the summer," said Nationwide chief economist Kathy Bostjancic.
She expected the Fed can continue holding rates steady for a few months.
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Source: AFP
