Employment Growth Slows as Regional Manufacturing Slips Back Into Contraction

U.S. Labor Data Softens Further as Regional Manufacturing Contracts

U.S. labor conditions showed another month of limited progress in September while regional factory activity weakened sharply in November, adding to concerns about slowing economic momentum.

The combined signals from the Bureau of Labor Statistics and the Philadelphia Fed point to a cooling employment backdrop and easing demand across key industrial sectors—elements traders are watching closely for policy implications.

Labor Gains Remain Limited as Job Growth Stalls

Total nonfarm payrolls rose by 119,000, extending the muted trend seen since April, while the unemployment rate held at 4.4%. Average hourly earnings rose 0.2% to $36.67, keeping the annual rate at 3.8%, while weekly hours held at 34.2.

The data release was delayed more than six weeks due to a federal government shutdown, although survey collection was largely completed beforehand.

The household survey showed 7.6 million unemployed, with long-term unemployment steady at 1.8 million, or 23.6% of the jobless population.

Participation edged up to 62.4%, but the employment-population ratio remained pinned at 59.7%.

Hiring strength was concentrated in health care (+43,000), food services (+37,000), and social assistance (+14,000). Losses in transportation and warehousing totaled 25,000, with declines in both storage (–11,000) and courier services (–7,000).

Federal payrolls fell another 3,000, deepening the 97,000 decline since January.

Manufacturing Survey Shows Renewed Weakness

The Philadelphia Fed’s November Manufacturing Business Outlook Survey signaled a renewed contraction across regional factories.

The general activity index improved but remained negative at –1.7, while both new orders (–8.6) and shipments (–8.7) turned negative, reversing earlier gains. Employment conditions were somewhat firmer, with the index rising to 6.0, supported by 16% of firms reporting increases; however, the workweek softened to 3.7.

Price pressures remained present but less intense. The prices paid index climbed to 56.1, while prices received dropped to 17.7. Firms also reported lower expectations for price increases over the next year, revising forecasts for their own selling prices down to 3.0% from 4.1%. Future activity expectations strengthened, with the six-month outlook index rising to 49.6, its highest reading in a year.

Market Forecast: Bearish Near-Term Outlook

For traders, the combined data signal softening on two fronts: payroll growth remains narrowly concentrated and insufficient to offset losses in transportation and government, while manufacturing orders and shipments indicate waning demand.

Wage growth remains steady but not accelerating, and business price expectations continue to cool.

Overall, the combined indicators support a bearish short-term view on U.S. labor and industrial momentum, increasing the probability of market positioning that anticipates further economic easing pressures.