Unemployment Rate Rises Slightly to 4.2 Percent

December 6, 2024 – Employment rose by 227,000 in November as the U.S. unemployment rate rose slightly to 4.2 percent, according to the most recent U.S. Bureau of Labor Statistics report. The number of unemployed persons was 7.1 million in November. Employment trended up in healthcare, leisure and hospitality, government, and social assistance. Retail trade lost jobs.

Among the major worker groups, the unemployment rate for Blacks (6.4 percent) edged up in November. The jobless rates for adult men (3.9 percent), adult women (3.9 percent), teenagers (13.2 percent), Whites (3.8 percent), Asians (3.8 percent), and Hispanics (5.3 percent) showed little or no change over the month.

The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 1.7 million in November. This measure is up from 1.2 million a year earlier. In November, the long-term unemployed accounted for 23.2 percent of all unemployed people. The labor force participation rate, at 62.5 percent, changed little in November and has remained in a narrow range of 62.5 percent to 62.7 percent since December 2023. The employment-population ratio, at 59.8 percent, also changed little over the month but is down by 0.6 percentage point over the year.

The number of people employed part time for economic reasons changed little at 4.5 million in November. This measure is up from 4.0 million a year earlier. These individuals would have preferred full-time employment but were working part time because their hours had been reduced or they were unable to find full-time jobs. The number of people not in the labor force who currently want a job, at 5.5 million, changed little in November. These individuals were not counted as unemployed because they were not actively looking for work during the four weeks preceding the survey or were unavailable to take a job.

“The economy continues to produce a healthy amount of job and income gains, but a further increase in the unemployment rate tempers some of the shine in the labor market and gives the Fed what it needs to cut rates in December,” said Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management.

“Data this morning was a Thanksgiving buffet with payrolls spot on, revisions positive, but unemployment ticking higher despite the participation rate falling,” said Lindsay Rosner, head of multi-service investing at Goldman Sachs Asset Management. “This print doesn’t kill the holiday spirit and the Fed remains on track to deliver a cut in December.”

Related: More Than Half of U.S. Companies Anticipate Adding New Positions in the Second Half of 2024

Earlier this week, Fed chair Jerome Powell said the generally strong state of the economy affords him and his colleagues the ability to be patient when making interest rate decisions. Other officials have said they see additional interest rate cuts as being likely but subject to changes in the economic data.

Where Job Growth Occurred

• Healthcare added 54,000 jobs in November, in line with the average monthly gain of 59,000 over the prior 12 months. In November, ambulatory healthcare services added 22,000 jobs, led by a gain of 16,000 in home healthcare services. Employment also increased in hospitals (+19,000) and nursing and residential care facilities (+12,000).
• Employment in leisure and hospitality trended up in November (+53,000), following little change in the prior month (+2,000). Over the month, employment trended up in food services and drinking places (+29,000). Leisure and hospitality had added an average of 21,000 jobs per month over the prior 12 months.
• In November, government employment continued to trend up (+33,000), in line with the average monthly gain over the prior 12 months (+41,000). Over the month, employment continued to trend up in state government (+20,000).
• Employment increased by 32,000 in transportation equipment manufacturing in November, reflecting the return of workers who were on strike.
• Employment in social assistance edged up by 19,000 in November, similar to the average monthly gain of 18,000 over the prior 12 months. Over the month, individual and family services added 17,000 jobs.
• Retail trade lost 28,000 jobs in November, after showing little net employment change over the prior 12 months. In November, employment declined in general merchandise retailers (-15,000), while electronics and appliance retailers added jobs (+4,000).
• Employment showed little or no change over the month in other major industries, including mining, quarrying, and oil and gas extraction; construction; wholesale trade; transportation and warehousing; information; financial activities; professional and business services; and other services.

Going Forward

Global hiring intentions are holding steady for the fourth quarter of 2024, with a Net Employment Outlook (NEO) of 25 percent, though outlooks remain weaker compared to the fourth quarter of 2023 according to the latest ManpowerGroup Employment Outlook Survey. The survey, which gathered data from over 40,000 employers across 42 countries between July 1-31, reveals that while the NEO has increased by three percent from the previous quarter, it represents a five decline compared to the same period last year. This year-over-year decrease indicates that economic uncertainties continue to impact hiring plans, albeit with signs of quarter-over-quarter improvement.

“The global labor market is holding steady as we move into the fourth quarter, with relatively low unemployment and layoff activity in many countries,” said Jonas Prising, chairman and CEO of ManpowerGroup. “While the gradual quarter-over-quarter improvement shows employers are cautiously optimistic about hiring, the drop from a year ago suggests employers remain prudent in the midst of uncertainty. The continued strong outlook in the IT sector is driving demand for tech talent, especially with AI top of mind for businesses across every industry. Now is the time to prioritize retaining and attracting workers with specialized, flexible skills, and an adaptable mindset to adjust to the evolving requirements.”

Related: Hiring Confidence Slows as Employers Steer Economic Headwinds

Contributed by Scott A. Scanlon, Editor-in-Chief and Dale M. Zupsansky, Executive Editor  – Hunt Scanlon Media