US Job Growth Snaps Back in November; Shutdown Distorts Unemployment Rate

• U.S. job growth rebounded more than expected in November after government-related spending cuts triggered the biggest drop in nonfarm payrolls in nearly five years in October, suggesting no material deterioration in labour market conditions as businesses navigate economic uncertainty wrought by President Donald Trump's aggressive trade policy.
• While the Labour Department's closely watched employment report on Tuesday showed the unemployment rate at more than a four-year high of 4.6% last month, the Bureau of Labour Statistics changed its methodology after the 43-day government shutdown prevented the collection of data from households.
• The jobless rate is calculated from the household survey. No unemployment rate for October was published for the first time since the government started tracking the series in 1948. The BLS warned on Monday that standard errors around the November household survey results would be "slightly higher" than usual. Economists said they were focusing on private job growth to get a better sense of the labour market's health. Private employment growth has averaged 75,000 jobs per month over the past three months, which some economists said should allow the Federal Reserve to keep interest rates unchanged in January.
• "The firmer private sector employment figures support the Fed taking a pause in its rate-cutting cycle for some period," said Kathy Bostjancic, chief economist at Nationwide. "The unemployment rate ... should be taken with a large grain of salt since the disrupted normal collection of the household survey data due to the government shutdown distorted the data readings and is associated with higher-than-usual standard errors."
• Nonfarm payrolls increased by 64,000 jobs last month. The economy shed 105,000 jobs in October, the biggest decline since December 2020. That slide was tied to a decrease of 162,000 jobs in federal government employment, the most since June 2010.
• Employees who took deferred buyouts as part of the Trump administration's push to shrink the government's footprint collected their last paycheck in September.

(Source: Reuters)