according to analysis by UBS, the employment data released this week reveals potential weakness in the U.S. labor market, which could serve as a basis for the Federal Reserve to further cut interest rates early next year.

Affected by the government shutdown, data delayed by the U.S. Bureau of Labor Statistics (BLS) shows that non-farm payrolls increased by only 64,000 in November, remaining basically flat compared to April. Meanwhile, the unemployment rate has continued to rise in the latter part of this year, currently reaching 4.6%.

These data depict a picture of economic pressure at the end of the year. For example, the number of people involuntarily working part-time in November reached 5.5 million, an increase of 909,000 from the previous month. The Bureau of Labor Statistics explains that these people prefer full-time work but are forced to work part-time due to reduced hours or inability to find full-time positions.

In addition, the youth unemployment rate rose month-on-month to 16.3%, and the number of people unemployed for less than five weeks reached 2.5 million in November, an increase of 316,000 from September. This indicates that new entrants and job changers in the labor market are facing difficulties in finding stable positions. Although the full employment report for October was not disclosed, this week’s data confirms that federal government employment decreased by 162,000 in October.

Paul Donovan, UBS’s Chief Economist, pointed out in a report to clients that these data “sound multiple alarms.” He added that due to the government shutdown exacerbating the low survey response rate of the Bureau of Labor Statistics, the quality of the data itself should be treated with caution.

However, Donovan also stated that the report does not raise excessive concerns about the resilience of U.S. consumers, as employment in the food service industry continues to grow, indicating that the trend of entertainment consumption is still ongoing. Nevertheless, the health of the labor market may have enough hidden concerns to justify a “precautionary rate cut” by the Federal Reserve next year.