The nation’s unemployment rate plummeted dramatically to 8.6 percent last month, after hovering around 9 percent for much of the year, as the pace of job growth quickened, the Labor Department reported Friday morning.
Private businesses created another 140,000 jobs in November. And although that was offset a little by job losses of 20,000 in the U.S. Postal Service and other government agencies, it follows a revised gain of 210,000 jobs in October that was significantly larger than the 158,000 originally reported.
Economist Jerry Jasinowski called the lowest unemployment rate since March 2009 “icing on the cake after a week of good news” on the economy, which included signs of healthy growth in manufacturing, strong early holiday sales and a big rally in the stock market.
“None of this indicates we are out of the woods by any means,” he said. “But in the overall scheme of things, there’s nothing like a good solid dose of economic growth to reduce deficits, create jobs and foster holiday cheer.”
The stock market welcomed the encouraging employment news at the start of trading Friday morning, with the Dow Jones Industrial Average shooting up 81 points to 12,101.
“The U.S. economy continues to show improvement, even as the picture for the rest of the world deteriorates,” said Nigel Gault, chief U.S. economist with IHS Global Insight. He noted that holiday sales, which started out strong over the Thanksgiving weekend, should give a “respectable” lift to the economy as new jobs help to lift the gloomy mood among consumers.
With the Christmas selling season off to a strong early start, job growth last month was particularly strong among retailers, who added 50,000 positions to their sales staff, with the much of the gains in clothing and electronics businesses that were flooded with shoppers in recent days, the department reported.
Employment growth in health care, food services, and professional and business services remained healthy. Manufacturing added a scant 2,000 jobs while the building industry — the hardest hit sector in the economy — lost another 12,000 positions.
The dramatic drop in the unemployment rate was concentrated among whites and adult men. It was due not only to people finding more jobs, but to about 300,000 discouraged workers dropping out of the labor force.
While jobs were more plentiful last month, raises were hard to find. Average hourly wages actually declined by 2 cents to $23.18, and were up by only 1.8 percent over the last year.
“The labor market continues to heal, but the pace of improvement is still rather slow,” said John Silvia, chief economist at Wells Fargo Securities, noting the disappointing absence of income growth.
Tom Porcelli, economist at RBC Capital Markets, said the decline in wages showed that beneath the surface, the job market remains sluggish and “unambiguously subpar.”
Incomes are “now “deep into negative territory,” especially when taking into account the rise in inflation, he said. “This is the household’s ammunition, and it remains weak. To supplement it, they are using savings to support consumption,” which is not a “sound” way to fuel economic growth, he said.