November jobs report
Mike Groll/AP
By Lucia Mutikani

WASHINGTON -- U.S. employers hired more workers than expected in November and the jobless rate fell to a five-year low of 7.0 percent, heightening expectations the Federal Reserve will soon start ratcheting back its bond-buying stimulus.

Nonfarm payrolls increased by 203,000 new jobs last month, the Labor Department said Friday.

The unemployment rate dropped three tenths of a percentage point to its lowest level since November 2008 as some federal employees who were counted as jobless in October returned to work after a 16-day partial shutdown of the government.

Economists polled by Reuters had forecast payrolls rising only 180,000 last month and the unemployment rate falling to 7.2 percent from 7.3 percent.

Job gains for September and October were revised to show 8,000 more jobs created than previously reported, lending more strength to the report. Other details were also upbeat, with employment gains across the board, average hourly earnings rising and the workweek lengthening.

In addition, the jobless rate fell even as the participation rate --
the share of working-age Americans who either have a job or are looking for one -- bounced back from a 35½-year low touched in October.

"The U.S. labor market is still far from healed, but it certainly is moving in the right direction," said Eric Stein, co-director of the Global Income Group at Eaton Vance Investment Managers in Boston.

U.S. stocks bounced higher at the open, the dollar rose against the euro and the yen, and U.S. benchmark Treasury yields hit a three-month high as traders increased bets the Fed could reduce its bond purchases as early as its next meeting on Dec. 17-18.

The central bank has been buying $85 billion in Treasury and mortgage-backed bonds each month to hold long-term borrowing costs down in a bid to spur a stronger economic recovery.

Despite the jobs data, many economists said the central bank was still likely to hold off reducing its purchases until January or March to ensure the economy was on solid ground.

"This number puts a December taper on the table, but it isn't a certainty," said Stein.

Mixed Economic Data

Economic data so far for the fourth quarter have been mixed, with labor market and consumer spending indicators firming. However, the housing market and business spending have slowed.

Economists believe the Fed will probably not want to pull back on its stimulus before lawmakers on Capitol Hill strike a deal to fund the government. That could come as soon as next week, however. Congressional aides have said negotiators were down to the final details as they tried to close in on a deal.

A separate report from the Commerce Department showed consumer prices were steady in October, after having risen by 0.1 percent for three straight months. Over the past 12 months, prices rose 0.7 percent, the smallest gain since October 2009.

Excluding food and energy, prices were up just 0.1 percent for a fourth straight month. These so-called core prices were up only 1.1 percent from a year ago.

Both inflation measures remained well below the Fed's 2 percent target, and some economists said they provided another reason for the central bank to move cautiously in pulling back its stimulus.

"I don't think the Fed is in a big rush to do anything drastic in the absence of inflation," said Michael Marrale, a managing director at ITG in New York. "A few strong jobs numbers does not mean we are out of the woods."

Details Upbeat

Job gains in November were broad-based. Private-sector payrolls rose 196,000. But government employment also increased as hiring by state and local governments offset a decline in federal employment.

Manufacturing payrolls moved up 27,000, rising for a fourth straight month. Construction employment advanced 17,000, adding to October's gains even as the housing recovery has slowed.

Retail employment slowed, adding 22,300 last month compared to 45,800 in October. A late Thanksgiving holiday could have resulted in some of the seasonal hiring not being captured in November's report.

Leisure and hospitality, as well as professional and business services payrolls showed gains, but at a slower pace than in October.

The report also showed average hourly earnings rose by four cents last month, while the length of the workweek edged up to an average of 34.5 hours from 34.4 hours - both bullish signs for the economy.


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Robert & Lisa

When the Fed stops printing 85 billion a month what do you think will happen?

December 06 2013 at 5:22 PM Report abuse -1 rate up rate down Reply
bambamsgolfcart

tsgarpirtaking is a more appropriate screen name for a bam bammer.

December 06 2013 at 3:51 PM Report abuse -2 rate up rate down Reply
bambamsgolfcart

seekingthetruth4u
Do you eat the government cheese log or do you suck on it?

++++++++++++++++++++++++++++++++++

Neither but I bet you could show me how that\'s done.

December 06 2013 at 3:49 PM Report abuse -2 rate up rate down Reply
bambamsgolfcart

seekingthetruth4u
And who says conservatives are racist bigots?

++++++++++++++++++++++++++++++

Liberal racist bigots, that\'s who.

December 06 2013 at 3:48 PM Report abuse +1 rate up rate down Reply
bambamsgolfcart

tsgarpirving
I would ask to borrow.....
Just like a conservative. Always looking for a handout. Get a job, then you can afford your own soap.

++++++++++++++++++++++

Even if I was looking for a handout you still wouldn\'t be able to provide me with any soap because you don\'t use any. And don\'t try and go out an buy some with your food stamps. You can\'t buy soap with food stamps. If you had a job you wouldn\'t be on the dole and would have cash to buy some.

December 06 2013 at 3:47 PM Report abuse rate up rate down Reply
dweeeb.buster

The dumbest 1%ers have really got themselves worked up into a frenzy over the news that due to declining levels of goon spending as a % of GDP, economic growth is finally picking up on the heels of the sequester and the government SLOWdown.

Too bad these dumb ones don't have brains that would have allowed them to foresee what thinking Americans knew was coming all along.

December 06 2013 at 3:40 PM Report abuse +1 rate up rate down Reply
bambamsgolfcart

I see the liberal racists and bigots are out in full force today too. I knew I smelled something foul.

December 06 2013 at 3:34 PM Report abuse -1 rate up rate down Reply
bambamsgolfcart

The bam bammers are out in full force today. Obviously they aren\'t part of the drop in the unemployment number. Maybe AOL should start posting some help wanted ads on Daily
finance for the unemployed bam bammers and get them off the dole.

December 06 2013 at 3:33 PM Report abuse -1 rate up rate down Reply
1 reply to bambamsgolfcart's comment
dweeeb.buster

someonedumb searches every day for a help wanted ad seeking an unemployable incompetent who can't count to two, and doesn't know when last week was.

He thinks his inability to locate such an opportunity is Bush' fault.

December 06 2013 at 3:36 PM Report abuse rate up rate down Reply
jdykbpl45

Unemployment may or may not have hit a 5 year low. You can\'t trust the Obama gang\'s figures any more. What was not reported, quite deliberately, was the rate of participation in the labor market. Unemployment has gond \"down\" as the rate of participation in the labor market has gone down. Too many melinials and others do not have jobss. Obama has killed employment in this country.

December 06 2013 at 2:56 PM Report abuse -1 rate up rate down Reply
dweeeb.buster

To get back to the subject at hand

Just imagine the booming economy all save the unemployable incompetents could now be partaking in were the sequester three times larger, and goon spending as a % of GDP had since been falling even more rapidly

If all goes well in the next round of the debt ceiling battle, we'll finally get a chance to find out. Although then another economic monster created by the goons will replace the goon induced disaster of the last 5 years as inflation comes roaring back.

December 06 2013 at 1:39 PM Report abuse -2 rate up rate down Reply