US Payroll Growth Stalls as Hiring Weakens, Unemployment Rises, and Wage Growth Slows

Unemployment Rate Rises as Participation Holds Steady The unemployment rate rose to 4.6% in November, exceeding market expectations and marking an increase from earlier in the fall. The number of unemployed climbed to 7.8 million, while the labor force participation rate held at 62.5%, suggesting the rise in unemployment was driven by hiring softness rather than workers re-entering the labor market. Longer-term indicators showed little improvement, with long-term unemployment steady at 1.9 million.

Sector Performance Highlights Defensive Hiring Job gains were concentrated in health care, which added 46,000 positions, and construction, which expanded payrolls by 28,000. These increases were partially offset by continued losses in federal government employment, down 6,000 in November following a steep October decline tied to deferred resignations. Transportation and warehousing shed 18,000 jobs, extending a downtrend from earlier in the year. Most other major industries, including manufacturing, financial activities, and professional services, showed little change.

Wage Growth Slows as Earnings Edge Higher Average hourly earnings rose by 0.1% to $36.86, bringing annual wage growth to 3.5%. The average workweek edged up to 34.3 hours, offering limited support to aggregate income growth. These figures suggest easing wage pressure, a key variable for Federal Reserve policy expectations.

Market Forecast: Bearish Bias for Risk Assets The combination of subdued payroll growth, rising unemployment, and cooling wage momentum supports a cautious near-term outlook. For traders, the data reinforces expectations that economic activity is losing pace, favoring a defensive stance across risk-sensitive assets. In the short term, this backdrop leans bearish for equities while supporting bonds and rate-sensitive instruments as markets continue to price a slower US growth profile.