What does this mean for the Fed and investors?The unemployment rate rose to 4.6% in November, according to the latest jobs report from the U.S. Bureau of Labor Statistics.It came in higher than the 4.5% rate that economists predicted and is up from 4.4% in September, the last time the BLS produced a report. It’s also up from 4.2% in November of 2024.The economy added 64,000 jobs in November, which was higher than the 45,000 new jobs that economists had projected. However, it was below the 108,000 jobs added in September.The healthcare industry saw the most gains, adding 46,000 jobs last month, with the most coming in ambulatory health care services (+24,000), hospitals (+11,000), and nursing and residential care facilities (+11,000). The construction industry added 28,000 jobs in November, while employment in social assistance grew by 18,000 jobs.The biggest losses came in transportation and warehousing, which lost 18,000. Employment in mining, quarrying, and oil and gas extraction; manufacturing; wholesale trade; retail trade; information; financial activities; professional and business services; leisure and hospitality; and other services showed little change in NovemberIn the public sector, federal government employment shrank by 6,000 jobs, following a decline of 162,000 in October. The October federal government job losses spiked as many federal employees that accepted a deferred resignation offer came off federal payrolls. Federal government employment is down by 271,000 since January.In addition, hourly wages on private nonfarm payrolls edged up 0.1%, which was below estimates of 0.3% growth. Over the past 12 months, average hourly earnings increased by 3.5%, which was below estimates of 3.6% and down from 3.8% the previous month.Stocks were moving lower on Tuesday with the S&P 500 down about 25 points, the Dow Jones Industrial Average off about 220 points, and the Nasdaq ticking 10 points lower.While job gains were higher than expected, they were still fairly low, and both wage growth and the unemployment rate missed estimates.“The unemployment rate rose to the highest since 2021,” Bill Adams, chief economist for Comerica Bank, said. “It’s risen considerably more for Black and African American workers and for teenagers, demographic groups whose unemployment rates tend to be leading indicators of the outlook for the broader job market. The latest jobs data pressure the Fed to cut rates again when they next meet in January. Hiring momentum has weakened in recent months, and the Fed will want to arrest this deterioration and help labor demand regain traction.”Chris Zaccarelli, chief investment officer for Northlight Asset Management, said this data should lead to continued rate cuts due to the risks to full employment. But given the dot plot projections for only one rate cut in 2026, Zaccarelli said it remains to be seen how attentive the Fed is to the labor market versus inflation.“All things being equal, this data should be good for the market (e.g. bad news = good news) in the short run, but it may be a situation of be careful for what you wish for – although the market generally cheers rate cuts, if the Fed is forced to cut rates more aggressively next year because we are headed into a recession, the stock market will drop instead,” Zaccarelli said.For investors, they should be looking longer-term and be selective.“This combination gives the Fed more freedom to pivot without panic—and gives investors a reason to lean into quality, income, and long-term themes rather than short-term noise. We’re entering a market environment where selectivity matters more than ever,” Gina Bolvin, president of Bolvin Wealth Management Group, said.Original Post