The nation’s unemployment rate last month fell sharply from 7.3 percent to 7 percent, the lowest in five years, as businesses added another 203,000 jobs, the Labor Department reported Friday morning.
The much-improved jobs picture reflected a sharp snapback from a temporary increase in the unemployment rate caused by the 16-day federal government shutdown in October.
While the shutdown wreaked havoc with the unemployment rate, jobs continued to grow steadily at about 200,000 a month, suggesting that the underlying economy was not much affected by the temporary interruption of federal services. Also, another 8,000 jobs were added in September and October, which were not previously detected by the department.
Job growth was solid and widespread in November from transportation and manufacturing to health care, retail and office work. Only the federal government lost significant jobs, with a 7,000 monthly loss adding to a 92,000 decline in employment in the last year in the bureaucracy.
November’s gains in employment were “good, but not great,” said Justin Wolfers, economics professor at the University of Michigan, noting that job growth averaging about 200,000 a month will “slowly cut into unemployment.”
“The recovery continues. It’s still frustratingly slow,” he said. “The optimistic take on the jobs report is that it was OK despite damage done by the government shutdown. So perhaps there’s greater underlying strength.”
Chris Williamson, economist at Markit, said the unexpectedly strong growth in jobs and “headline-grabbing” drop in unemployment will please the Federal Reserve and make it more inclined to end its massive economic stimulation program.
Because it could move the Fed to start withdrawing liquidity from financial markets earlier than expected next year, the news had a mixed reaction in early trading in the financial markets.
“The good news sends markets into a schizophrenic dysphoria,” because it means the party may be over soon for stock and bond investors, said Tyler Durden, analyst at Zero Hedge.
• Patrice Hill can be reached at phill@washingtontimes.com.
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