The U.S. added just 64,000 jobs in November — a sign the labor market is slowing

The job market continues to show signs of cooling.

U.S. employers added just 64,000 jobs in November, according to a delayed report from the Labor Department Tuesday, while the unemployment rate rose to 4.6% from 4.4% in September. That’s the highest unemployment rate in more than four years.

The jobs report was initially set to come out earlier this month, but the government’s ability to monitor the job market was hampered by the six-week federal shutdown.

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That delayed job tallies for October and November, both of which were released on Tuesday. The report showed the U.S. saw a net loss of 105,000 jobs in October. That was led by a large drop in the federal workforce, as 162,000 government workers who’d taken buyouts earlier in the year were officially dropped from the payrolls.

Furloughed federal workers were unable to conduct their usual survey of households in October, so the unemployment rate for that month remains unknown.

The Fed has lowered interest rates

Health care and construction were among the few sectors to add jobs in November: Health care added 46,000 jobs while construction added 28,000.

But manufacturing continued to struggle with a loss of 5,000 jobs in November, after a loss of 9,000 jobs in October. Meanwhile, leisure and hospitality cut 12,000 jobs last month.

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Concerns about the labor market have been building, leading the Federal Reserve to lower its benchmark interest rate last week for the third time since September.

“It’s a labor market that seems to have significant downside risks,” Fed Chairman Jerome Powell warned. “People care a lot about that. That’s their jobs. That’s their ability — if they get laid off or if they’re entering the labor force — to find work. So that’s really important to people.”

Why the labor market is slowing

Monthly job gains have dropped sharply since the beginning of the year. But Powell warns the official numbers may still be understating the weakness in the job market. The numbers are expected to be revised lower early next year when the Labor Department incorporates more complete information.

Hiring has slowed for two reasons. Not only are employers looking for fewer workers, but fewer would-be workers are looking for new jobs. Aging baby boomers are retiring at a rapid rate. And the Trump administration’s aggressive crackdown on both legal and illegal immigration has limited the growth of the U.S. workforce. That means the economy needs to add fewer jobs each month to keep the unemployment rate in check.

Paychecks are still generally growing faster than prices, with average wages in November up 3.5% percent from a year ago.

That’s boosting workers’ buying power, though the pace of wage gains has slowed this year.

Inflation reports were also disrupted by the government shutdown this fall. An overdue report on the cost-of-living for November will be released on Thursday.