Nonfarm Payrolls Increased More Than Expected

We are finally up to date on the Employment Situation report from the U.S. Bureau of Labor Statistics (BLS) this morning. After skipping over October initially and pushing back the November numbers a week and a half, we finally see where we are: +64K now jobs were created last month overall, with an Unemployment Rate rising to +4.6%.

Let’s look at the Unemployment Rate first, because it is relatively simple and comprehensive. It’s the highest rate of overall unemployment since July 2021, when we were also growing the labor market by more than +900K jobs that month. Today’s Unemployment Rate is the fifth straight month higher, from June 2025’s +4.1% (although October currently shows a blank space).

Healthcare services once again saw the biggest number of new hires by sector last month, +46K, followed by Construction at +28K and Social Assistance jobs +18K. Trade/Transportation/Utilities fell -18K for the month, and other key sectors — Manufacturing, Leisure & Hospitality, etc. — don’t show up in this morning’s briefing on jobs numbers from the BLS this morning.

Hourly Wages dropped to +0.1% from an anticipated +0.3% (+3.5% year over year, 10 bps lower than expected), which is a sign that labor is not currently aggravating inflation. That said, the number of Americans working part-time for economic reasons has blossomed from +909K in September to +5.5 million last month. This explains somewhat the dip in the Average Workweek to 34.2 hours in November.

Meanwhile, Labor Force Participation actually increased to 62.5%, the best rate since April of this year. This metric looks aligned to a good extent with this massive increase in part-time workers, and it has to do with the deferred resignation program in October, which shed -162K federal government jobs in that month alone. This is slightly higher than the anticipated -150K government jobs shed.

October Headline: -105K Jobs, +52K Private Sector

Those federal government layoffs were part of a systemic, planned removal of the federal government workforce, first brought about by Elon Musk’s DOGE program but more effectively by these deferred resignation offers. It appears to be a one-time adjustment to the labor market, but it is a significant adjustment. Federal government employment is down -271K so far, year to date.

The trailing 4-month average in job growth is currently +16K, including thew big October drawdown. The 4-month average previous to that is +59K, and +159K in the 4-month average from December 2024-March 2025. Even today’s seemingly decent +64K new jobs created overall is less than a quarter of the +261K reported in November of 2024.

Key for the American labor market going forward will be whether — and to what extent — the private sector will be willing to absorb these ex-government workers into 2026. This was part of the architecture to the Big Beautiful Bill, making companies more profitable to, in theory, hire a bigger labor force. But the numbers are daunting: +316K Americans are newly out of work between September and November.

How Has the Market Reacted to the Jobs Numbers?

Pre-market futures were in the shallow red directly ahead of the BLS numbers hitting the tape this morning, then veered into the green moments afterward. However, they’ve since slid to slightly worse levels at this hour, though still nothing dire: the Dow is -25 points at this hour, the S&P 500 is -10, the Nasdaq -62 points and the small-cap Russell 2000 is -2 points presently. Bond yields for both the 10-year and 2-year have increased: to +4.17% and +3.48%, respectively.

As for odds on the next interest rate cut based on these figures, they don’t appear to have much moved the needle: chances for a January cut are currently less than 25%, while March — the meeting directly following — remains a coin flip.

We will get into details on today’s October Retail Sales report in our afternoon write-up, and we’ll be sure to include S&P flash Services and Manufacturing PMI and a fiscal Q4 earnings report from wide-range homebuilder Lennar (LEN), which looks to break its streak of two-straight negative earnings surprises.

Zacks Naming Top 10 Stocks for 2026

Want to be tipped off early to our 10 top picks for the entirety of 2026? History suggests their performance could be sensational.

From 2012 (when our Director of Research Sheraz Mian assumed responsibility for the portfolio) through November, 2025, the Zacks Top 10 Stocks gained +2,530.8%, more than QUADRUPLING the S&P 500’s +570.3%.

Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2026. Don’t miss your chance to get in on these stocks when they’re released on January 5. 

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

Source Zacks-com