Nonfarm payrolls rose slightly more than expected in November, the U.S. Bureau of Labor Statistics reported on Tuesday in data delayed by the government shutdown.

employment growth The total for the month was 64,000, better than the Dow Jones estimate of 45,000.

The unemployment rate rose to 4.6%, higher than expected and the highest level since September 2021. A more comprehensive measure that includes discouraged workers and people working part-time for economic reasons has seen the unemployment rate rise to 8.7%, with a peak dating back to August 2021.

In addition to the November report, the Bureau of Labor Statistics also released summary data for October, showing that employment fell by 105,000. While there are no official estimates, Wall Street economists largely expected a decline after a surprise gain of 108,000 jobs in September.

October’s recession followed a sharp decline in government employment as a deferred layoff system introduced earlier this year took effect. Government employment fell by 162,000 this month and by another 6,000 in November.

Still, October’s decline marked the third time in six months that payrolls have turned net negative. The BLS report also showed that August’s numbers were revised down by 22,000, to a decrease of 26,000, while September’s initial number was down 11,000.

The U.S. Bureau of Labor Statistics warned that the household survey used to calculate the unemployment rate will be affected by the government shutdown for months. Challenges in obtaining data for October led to the cancellation of both the jobs report and the closely watched consumer price index.

Despite the complexities, the report paints a familiar picture of the labor market.

The employment environment remains one of low hiring and low firing, also affected by strict border policies under President Donald Trump that drained the labor force of the usual influx of immigrants.

Agency data showed that much of November’s growth came from a familiar source – the health care sector added 46,000 jobs and accounted for more than 70% of the net gain total. Construction added 28,000 people, while social assistance contributed 18,000.

On the downside, the transportation and warehousing industry lost 18,000 jobs, part of an ongoing trend of job losses in the industry. The leisure and hospitality industry also lost 12,000 people.

From a policy perspective, the Fed must walk a difficult line between trying to prevent further weakness in the labor market and preventing stubbornly high inflation from worsening.

At its most recent meeting, the central bank lowered its key interest rate by a quarter of a percentage point but said the bar for further cuts was higher. The Federal Reserve has cut interest rates three times in a row since September, lowering the benchmark funds rate to a target range of 3.5%-3.75%.

“Given the data outage, the Fed is unlikely to pay much attention to today’s report,” said Kay Haig, global co-head of fixed income and liquidity solutions at Goldman Sachs Asset Management. “The December jobs data report, released in early January ahead of the next meeting, may be a more meaningful indicator for the Fed to determine the near-term policy trajectory.”

The market continues to be low on the possibility of another interest rate cut in January. Following the jobs report, the probability was about 24.4%, unchanged from Monday, according to CME Group. FedWatch.

Fed officials insist the labor market is not the source of inflation, a claim backed up by Tuesday’s jobs report.

Average hourly earnings rose just 0.1% this month, missing expectations of 0.3% and up 3.5% from a year earlier, the smallest annual gain since May 2021.

The 0.1 percentage point increase in the unemployment rate was mainly the result of labor force growth.

Household employment actually increased by 407,000 over the two-month period. However, this was partially offset by an increase in the labor force of 323,000 as the labor force participation rate edged up to 62.5%.