Jobs Up, Jobless Rate Higher: Inside America’s Strange 4.6% Unemployment Moment - ($SPY $QQQ $DIA ) - Vista Partners LLC

The latest US jobs report reads like a paradox in pinstripes: hiring is still happening, but the unemployment rate has quietly climbed to its highest level in four years.

A labor market with a limp

In November, the economy added roughly 64,000 jobs, modestly beating many economists’ expectations but landing well below the kind of monthly gains that used to inspire victory laps at the Federal Reserve. At the same time, the unemployment rate ticked up to 4.6%, the loftiest since 2021 and a full percentage point above the lows reached during the post-pandemic hiring boom.

This is the statistical equivalent of smiling for the photo while standing on a roller skate. Job creation is positive, but not nearly strong enough to absorb everyone reentering or remaining in the labor force, particularly after an October in which the economy actually shed around 105,000 positions.

Shutdowns, buyouts, and bureaucratic shrinkage

Washington, never one to miss an opportunity to complicate a narrative, managed to layer a 43‑day government shutdown on top of an already cooling labor market. The shutdown delayed the jobs report and scrambled the underlying data, leaving policymakers to fly somewhat by instruments and hope the gauges weren’t miscalibrated.

Federal employment, meanwhile, has been slimming down faster than a New Year’s resolution—over 150,000 federal workers accepted buyouts as part of the administration’s effort to downsize government, with many of those departures registering in the October and November figures. The result is a labor market that looks weaker on paper not only because the private sector is cautious, but because the public sector is actively retreating.

Strong sectors, soft underbelly

Beneath the headline numbers, the story is one of clear winners, quiet losers, and a growing crowd of workers stuck in the in‑between. Health care continues to play the role of labor market MVP, adding roughly 46,000 jobs in November, while construction also posted a solid gain of about 28,000. These are the sectors still hiring even as executives elsewhere practice the corporate variant of “no sudden movements.”

On the softer side, transportation and warehousing cut about 18,000 jobs, and manufacturing trimmed around 5,000, reflecting a world in which goods demand is less exuberant and global trade comes with more tariffs and less certainty. A broader underemployment measure that includes discouraged workers and those forced into part‑time roles for economic reasons has climbed to the high‑8% range, suggesting a job market that feels weaker than the topline unemployment rate alone would imply.

Households nervous, Fed uneasy

Households, for their part, are sounding less like the confident shoppers of 2021 and more like skeptics wandering the clearance aisle. Surveys show rising gloom about job prospects, with more people reporting that jobs are harder to find and wage gains losing their earlier momentum. There are roughly 710,000 more people unemployed than a year ago, and the pool of workers stuck in long‑term unemployment—27 weeks or more—remains elevated compared with last year even after a recent improvement.

The Federal Reserve now faces the central banker’s version of an uncomfortable dinner conversation: a labor market that is clearly cooling while inflation has not quite surrendered. Fed officials have flagged “downside risks” to employment, and a preliminary benchmark revision suggests that earlier job growth was overstated by hundreds of thousands of positions, making the past year look less like a boom and more like a slow‑motion plateau.

A hiring recession, not a crash

Economists have begun to describe the current phase as a “hiring recession” rather than a classic downturn, a period in which companies avoid mass layoffs but quietly stop adding staff. Initial jobless claims remain relatively low, supporting the idea that firms are more inclined to freeze than fire, especially as tariffs, higher borrowing costs, and political uncertainty cloud the outlook. In practical terms, that means it is still easier to keep your job than to find a new one.

If the labor market has a silver lining, it is that a 4.6% unemployment rate remains historically moderate, and forward-looking estimates project only modest further drift rather than a spike. But for workers polishing résumés and for policymakers trying to choreograph a soft landing, this is an economy walking a narrow ledge—adding just enough jobs to avoid a fall, while the ground beneath looks a little farther away each month.

Jobs Up, Jobless Rate Higher: Inside America’s Strange 4.6% Unemployment Moment – ($SPY $QQQ $DIA )

A labor market with a limp

Shutdowns, buyouts, and bureaucratic shrinkage

Strong sectors, soft underbelly

Households nervous, Fed uneasy

A hiring recession, not a crash

The Sources

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