WASHINGTON - A fourth straight month of solid hiring cut the U.S. unemployment rate in November to a five-year low of 7 percent. The surprisingly robust job gain suggested that the economy may have begun to accelerate.
It also fueled speculation that the
Federal Reserve will scale back its economic stimulus when it meets later this
Employers added 203,000 jobs last
month after adding 200,000 in October, the Labor Department said Friday.
November's job gain helped lower the unemployment rate from 7.3 percent in
The economy has now generated a
four-month average of 204,000 jobs from August through November. That's up from
159,000 a month from April through July.
After the report was released, the
yield on the 10-year Treasury note rose to 2.91 percent, up from 2.86 percent
just before the employment figures were announced. That was a sign that many
investors think the Fed will slow its monthly bond purchases, which have been
intended to keep interest rates low.
An especially encouraging sign was
that much of November's job growth was in higher-paying industries.
Manufacturers added 27,000 jobs, the most since March 2012. Construction
companies added 17,000. The two industries have created a combined 113,000 jobs
in the past four months.
Friday's report follows other positive
economic news. The economy expanded at an annual rate of 3.6 percent in the
July-September quarter, the fastest growth since early 2012, though nearly half
that gain came from businesses rebuilding stockpiles. Consumer spending grew at
the slowest pace since late 2009.
Greater hiring could support healthier
spending. Job growth has a dominant influence over much of the economy. If
hiring continues at the current pace, a virtuous cycle will start to build:
More jobs usually lead to higher wages, more spending and faster growth.
But more higher-paying jobs are also
needed to sustain the economy's momentum. Roughly half the jobs that were added
in the six months through October were in four low-wage industries: retail;
hotels, restaurants and entertainment; temp jobs; and home health care workers.
The Fed has pegged its stimulus
efforts to the unemployment rate. Chairman Ben Bernanke has said the Fed will
ease its monthly purchases of $85 billion in bonds once hiring has improved
The recent economic upturn has been
surprising. Many economists expected the government shutdown in October to
hobble growth. Yet the economy motored along without much interruption,
according to several government and industry reports.
Early reports on holiday shopping have
been disappointing. The National Retail Federation said sales during the
Thanksgiving weekend -- probably the most important stretch for retailers -- fell
for the first time since the group began keeping track in 2006.
Consumers are willing to spend on big-ticket items. Autos sold in November at their best pace in seven years, according to Autodata Corp. New-home sales in October bounced back from a summer downturn.