November Jobs Data Indicates Softening Economy

The U.S. economy gained just 64,000 non-farm payroll jobs in November, according to data released Tuesday by the U.S. Bureau of Labor Statistics (BLS). Employment’s little change since April of this year indicates that the nation’s job market is softening, but economists are not sounding any alarms just yet. 

“The picture of the labor market remains mixed after today’s jobs report,” Sam Williamson, a senior economist at First American, said in a statement. “Overall, the labor market still looks like a ‘low-fire, low-hire’ environment—employers aren’t adding aggressively, but layoffs remain contained.”

While November’s jobs increase was a pleasant surprise, the report noted that payroll employment fell by 105,000 jobs in October, largely due to a federal deferred-resignation program that cut employment by 162,000, and that the August and September employment data were revised down by 33,000 jobs.

On top of these negative revisions from prior months, the unemployment rate rose to 4.6% with 7.8 million people unemployed. While this is little changed from September, it is up compared to a year prior, when the jobless rate was 4.2% with 7.1 million people unemployed. 

The most notable job gains in November occurred in health care (+46,000 jobs) and construction (+28,000 jobs).

Within the construction sector, residential building construction gained 3,400 jobs. However, the number of residential specialty trade contractor jobs dropped by 3,700, offset by an 18,700 job increase for nonresidential specialty trade contractors. 

The real estate sector also posted a modest job gain in November, adding 3,200 jobs.

Unsurprisingly, employment in the federal government sector continued to trend down, losing 6,000 jobs. So far this year, federal government employment is down by 271,000 jobs. The transportation and warehousing sector also showed a sizable decline in jobs, losing 18,000 jobs. 

For Mike Fratantoni, the senior vice president and chief economist at the Mortgage Bankers Association, this report supports the decisions made by the Federal Reserve last week to lower interest rates. 

“FOMC members who voted last week for an additional rate cut received support for that action, given these signs of a weaker job market,” he said in a statement. “Inflation data later this week will be the other key driver of future monetary policy steps.”

Looking further ahead to 2026, economists say the Fed will be keeping a close eye on the labor market. 

“While today’s report may strengthen the case for additional cuts early next year, Thursday’s inflation data and December’s jobs report—both arriving before the next FOMC meeting—will carry greater weight in shaping policy decisions,” Williamson said.

Economists agree that this data will not have any immediate impact on mortgage rates, but the notion of an overall cooling economy may cause rates to come down in 2026, potentially fueling at least some housing demand. 

“For the 2026 housing market, it is going to be a tug of war between the labor market and the mortgage market,” Lisa Sturtevant, the chief economist at Bright MLS, said in a statement. “Cooling economic conditions are likely to lead to lower mortgage rates in 2026, which would help fuel strong homebuying activity next year. However, uncertainty about job security among workers could temper housing demand, offsetting the benefits of lower rates. It is still unclear which driver will win out in the year ahead.”