November Jobs Report: Unemployment Creeps Up
In the November jobs report, released on Tuesday, the unemployment rate rose to 4.6% but net job gains were stronger than expected, coming in at 64,000.Data for October told a different story, with net job losses of 105,000—including a staggering 162,000 federal jobs lost.
This massive decline in federal employment coincided with the end of the buyout period, where many federal workers were given the option to take a buyout at the beginning of the year that would include severance pay until the end of September. This was widely communicated, and the market did not have a significant reaction to this news.
Higher unemployment, even if not a major concern at this point, does bolster the argument for the Fed to continue cutting interest rates in 2026. Prediction markets for the Fed did not materially change on this news, primarily because they were looking forward to Thursday’s CPI report.
November Inflation Declines (Suprisingly)
Inflation has been moving in the wrong direction for most of 2025, reinforced by the 3% CPI print that we saw in September. Thursday’s report showed a different story. November inflation fell to 2.7%, a positive surprise against the 3.1% estimate from the Wall Street Journal’s survey of economists.Shelter, a measure we follow closely given its relation to “sticky” inflation, maintained at a 0.2% increase from September to November. This is consistent with the lowest levels seen in 2025 and something that is critical for maintaining control of inflation.
The November report was a positive surprise but expect the markets to react cautiously, even if it lends itself to continued interest rate cuts in 2026.
Final Thoughts
The lack of data for October and late release of November, both consequences of the government shutdown, mean that the market will likely be putting more weight on the January reports. It is, however, reassuring to see economic data that confirms the Fed’s most recent move to cut interest rates.As Chris Gunster, our Head of Fixed Income, puts it, "This week’s release of the delayed CPI data was much lower than expected, further bolstering the case for at least two more 0.25% cuts for 2026."
Closing Time
Because of how the calendar falls, this will be our last scheduled edition of Investment Insights for 2025. We’ll resume our regular Friday notes in January, but if anything immediate arises before then, we’ll make sure to be in touch.We hope all of you have a wonderful finish to 2025, and if there is anything we can do for you in the final two weeks of the year, please do not hesitate to reach out to one of your Fidelis team members.
