Employers added a solid 203,000 jobs in November, helping to power the unemployment rate down three-tenths of a percentage point to 7 percent, the lowest rate in five years the government said Friday in a strong employment report.
The healthy jobs report came a day after the Commerce Department revised upwards the growth estimates for July through September, determining the economy grew a surprisingly strong annual pace of 3.6 percent.
The job gains were broad, across most sectors of the economy and included a slight upward revision to prior months jobs numbers than put October hiring at 200,000. Professional and business services grew by 35,000 jobs in November and manufacturing, which had seen sluggish hiring over much of the year, saw 27,000 new jobs in November.
Mainstream economists had expected about 185,000 new hires and only a slight dip in the jobless rate. The spate of recent positive data suggests the economic recovery is still gathering steam, and if Washington could stay out of the way could return to greater normalcy.
House and Senate budget negotiations have sparked cautious optimism of a small deal next week that could remove the threat of another government shutdown and potential debt default. The biggest surprise was the sharp drop in the unemployment rate, from 7.3 percent down to 7 percent. The labor force participation rate held steady, albeit at a depressed rate, suggesting that the drop was not due to people dropping out of the workforce. The jobless rate is derived from a survey of households, and while the results are volatile month to month, more people reported they were employed and fewer reported they were unemployed.
Friday’s jobs numbers are also consistent with the improvements in the first-time claims filed for unemployment benefits. The government reported Thursday that this number fellow below a key threshold to 298,000. The four-week average of first-time claims, the preferred way economists look at this numbers, is about 322,000 and represents a level that points to an economy gaining steam.