The unemployment rate edged up from 4.1% in October to 4.2% in November, while total nonfarm payroll employment added 227,000 jobs, beating consensus estimates.
The number of unemployed people was little changed from November, at 7.1 million. A year earlier the jobless rate was 3.7%, and the number of unemployed people, 6.3 million.
Amidst continued labor market cooling, the latest figures from the Labor Department demonstrate ongoing resilience despite elevated interest rates, providing clarity for markets following an October jobs report distorted by labor strikes and the fallout from hurricanes.
Still, “mixed signals” appear in November’s data, says Sam Williamson, senior economist at First American, citing the October Job Openings and Labor Turnover Survey (JOLTS).
“The broader trend of declining quits and openings points to a continuation of ‘The Great Stay,’ where employers are being slow to hire, slow to fire, and workers are staying put,” said Williamson. “Despite the jobs bounce back [sic], the uptick in the unemployment rate likely boosts the chances of a quarter-point interest rate cut later this month by the Federal Reserve.”
Policymakers lowered the federal funds rate to a target range of 4.50%-4.75% at their November meeting, but the October jobs report added uncertainty to more cuts in December.
The labor force participation rate fell to 62.5% last month, remaining below pre-pandemic levels, while October payrolls were revised upward to 36,000 from 12,000.
Policy uncertainties and their economic implications, not to be settled until after the incoming Trump administration takes office in January, hangs like a low-pressure system over housing.
“The potential impacts of the incoming administration’s policies have pushed 10-year Treasury yields, and consequently mortgage rates, higher,” Williamson added, “though unexpected labor market or economic downturns could lower them.”
Most mortgage industry analysts expect mortgage rates to end 2025 in the low 6s, keeping affordability at the forefront of lenders’ minds, their eyes on the December 18-19 Fed meeting.
