The US Bureau of Labor Statistics released labour market data for October and November yesterday, after the data for September and October were delayed in response to the US government shutdown. The data was highly anticipated by investors, who are seeking to predict when and by how much the US Federal Reserve Board (Fed) will lower interest rates. Overall, the US economy lost jobs over the two months, with the unemployment rate edging higher.

• The US economy shed 105,000 jobs in October. This marked its largest decline since December 2020, largely in response to the loss of government jobs. Federal workers officially left their jobs after receiving deferred packages as the government sought to reduce its size earlier this year.
• In November, the economy added 64,000 jobs. A rise in jobs in the construction industry was partially offset by another decline in government jobs.
• The US unemployment rate rose to 4.6% in November from 4.4% in September. This marked its highest level since September 2021.
• Meanwhile, retail sales stalled in October, posting no growth (0.0%). This marked the slowest pace of growth since falling in May. Sales at automobile dealers and gasoline stations declined. Conversely, sales of furniture and clothing increased.
• Investors immediately analyzed the data to predict what the Fed would do next. At its last meeting, data showed Fed officials expecting one interest rate cut next year.

The US labour market has come under pressure, which has contributed to the Fed lowering interest rates over the second half of 2025. Investors expect the Fed to cut interest rates next year, based on market activity following the announcement. Spending appears to be losing momentum, suggesting that consumers are being hindered by trade tensions, still elevated inflation and higher interest rates compared to just a few years ago.

If you would like to discuss this economic and market update or have questions about your finances and investments, please feel free to contact me anytime.