Both parties skeptical of sharp drop in unemployment rate

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Updated at 12:05 p.m. ET

The U.S. unemployment rate fell last month to its lowest level in more than two and a half years, the Labor Department reported Friday, but Republicans and Democrats alike are responding with limited optimism, tempered with a heavy dose of caution.

But while Democrats are pointing to the steady (albeit slow) growth in the economy as a sign of President Obama's success, Republicans say the details of the Labor Department's report reveal that job seekers are losing the "hope" that inspired them to support the president in 2008.

Employers added 120,000 jobs last month, bringing the unemployment rate to 8.6 percent in November. That's the lowest jobless rate since March 2009, but there are still 13.3 million Americans unemployed. One key reason the jobless rate fell (down from 9 percent in October) is that roughly 315,000 people simply gave up looking for work and are technically no longer considered "unemployed."

Mr. Obama, while visiting a Washington office building undergoing energy efficiency retrofitting, pointed out that, "despite some strong headwinds, this year the economy has now created, in the private sector, jobs for nearly 21 months in a row."

Following up on an earlier initiative to promote energy-efficient construction, Mr. Obama today announced that he's directing all federal agencies to make at least $2 billion worth of energy efficiency upgrades over the next two years. Flanked by former President Bill Clinton, Mr. Obama said energy efficiency upgrades will create construction jobs, save businesses money on energy bills and cut down on pollution.

Mr. Obama said he was directing federal agencies to take action because he couldn't wait for Congress to provide the proper incentives for private businesses to do the upgrades. "As president, my most pressing challenge is doing everything I can, every single day to get this economy growing faster," he said.

Alan Krueger, chairman of the president's Council of Economic Advisers, said in a White House blog post that the unemployment report "provides further evidence that the economy is continuing to heal from the worst economic downturn since the Great Depression, but the pace of improvement is still not fast enough given the large job losses from the recession that began in December 2007."

Krueger pointed out that the world economy is in a fragile state, leaving the U.S. economy vulnerable to more downward swings. "In this environment, the President's American Jobs Act is the right medicine to sustain and strengthen the recovery," he wrote.

While the White House wants more stimulus to speed up the economy, Republicans countered that the president's policies, particularly the 2009 stimulus, have failed to meet expectations.

"Any job creation is welcome news, but the jobless rate in this country is still unacceptable," House Speaker John Boehner said in a statement. "As you may remember, the Obama administration promised unemployment would stay below eight percent if its 'stimulus' was enacted. That promise has gone unfulfilled."

Boehner said the Senate should pass the more than two-dozen bills the House GOP has passed with the intent of limiting government interference in business and thus boosting the economy.

Similarly, Republican National Committee Chairman Reince Priebus called the falling unemployment rate "positive news for American families heading into the holiday season," but also pointed to the "troubling trend" of workers leaving the labor force.

"America hasn't seen the progress we were promised," he said, referring to the 2009 stimulus.

House Democratic Whip Steny Hoyer, meanwhile, slammed the House GOP's jobs agenda as misguided and "ideologically driven."

"These are further positive signs for our recovery, but as long as Republicans continue to avoid passing a real jobs plan we will be unable to achieve the kind of significant job creation we need," he said.

Republican presidential contender Mitt Romney said the president's response to the state of the economy has been unacceptable.

"The Obama administration may have come to accept such a high level of joblessness as the new normal. I will never accept it," Romney said in a statement. "To me, the fact that so many millions of Americans are unemployed only highlights the urgent need for a fundamental change in the direction of our country... This is not exactly the hope and change that the American people bargained for."

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