November jobs report: Rebound not reacceleration

The latest jobs numbers are out from the U.S. Bureau of Labor Statistics. What do they mean for job seekers, employers and investors? Here’s a quick take from Glassdoor’s Lead Economist Daniel Zhao.

The November jobs report today shows a job market rebounding from the storms and strikes in October, while still cooling gradually. The larger job gains in November were boosted in large part due to temporary factors from Hurricanes Helene and Milton and the Boeing strike fading.

The job market ends 2024 carrying forward a similar theme to last year. Recession talk dominated fears entering 2023 and the job market beat those fears back even while cooling at a steady pace. Similarly, in 2024, the job market continued its progress towards a soft landing, despite an anxiety-inducing mid-year rise in unemployment that plateaued. As we head into 2025, the job market is still on a slowly cooling trajectory and awaits a catalyst like lower rates to accelerate jobs  growth.

Key stats:

Job market rebounds after storms and strikes pass

Hurricanes Helene and Milton and the Boeing strike dragged on payroll employment in October, but temporarily boosted job gains in November as their effects faded. Job gains over the last two months averaged 131,500, still somewhat slower than the pace from 2024 prior to October (191,200 per month average) as the job market continues to gradually cool.

Transportation equipment manufacturing went from losing 41,500 jobs in October to adding 32,000 in November, as the Boeing strike ended, suggesting the impact has at least mostly been reversed.

While we don’t have a precise estimate for the impact of the hurricanes, the CES second release response rate rose to 92%, up from a first release response rate of 47.4% in October, which was unusually large as hurricanes likely delayed survey collection.

Government jobs still playing catch-up

Government employment has been a significant driver of job gains, especially since mid-2022. Some of this jobs growth is catch-up for the recovery since the pandemic. While jobs in the private sector recovered relatively quickly from the pandemic and surpassed pre-pandemic employment levels in April 2022, state and local governments were much slower to rebound, taking until December 2023 for education and September 2023 for non-education employment to recover.

Even now, state & local government education payrolls are only up 1.3% compared to pre-pandemic while total private payrolls are up 4.9%. Similarly, state & local government non-education payrolls, which includes police officers, social workers and county clerks, are up 3.6%.

State and local governments continue to catch up on hiring as public sector wages locked into long-term contracts were slower to rise compared to private sector wages. However, if budgets start to dry up in 2025, this catch-up jobs growth may not continue.

Recession indicator no longer indicating

The unemployment rate rose slightly to 4.2% in November, crucially staying below the threshold needed to trigger the Sahm rule recession indicator. The plateauing in the unemployment rate over the last few months is encouraging after the mid-year rise in unemployment, but it still flashes a warning sign as the unemployment rate flirts with the threshold.

An additional weak spot in the November report was the prime-age employment-population ratio which fell to 80.4%, the lowest mark since December 2023. While this level is still relatively strong by historical standards, it is a touch below the pre-pandemic cycle high and points to a job market that is still cooling.

More insights

Sectors like leisure & hospitality also seem to have rebounded post-hurricanes, going from 2,000 jobs added in October to 53,000 jobs added in November.

One lagging sector was retail which lost 28,000 jobs in November on a seasonally adjusted basis, though this is likely due to a seasonal adjustment quirk as holiday hiring has shifted earlier in the season to September from November in the post-pandemic era.

Less cyclical sectors like health care, government and education continue to drive a large share of job gains in November. Leisure & hospitality has been stronger of late, while professional & business services and information drag.

Average hourly earnings grew 4% in November, unchanged from October. In the last few months, wage growth has come in hotter than expected, even as the year-over-year change remains flat.

Recent heat in wage growth has been from nonproduction & supervisory employees. By contrast, production & nonsupervisory wage growth has been flatter.

Similar to the prime-age employment-population ratio, prime-age labor force participation remains relatively high but is trending down.

The Black unemployment rate jumped to 6.4%, highest since March. Black labor force participation also fell under the surface from 62.9% to 62.4%.

To speak with Daniel Zhao about this report, please contact pr@glassdoor.com.