The numbers: The economy produced a robust 266,000 new jobs in November and the unemployment rate returned to a 50-year low, reflecting the resilience of the U.S. labor market.
The increase in employment — the biggest since January — was partly inflated by the return of nearly 50,000 striking auto workers at General Motors GM, +0.92%. Yet it was still a surprisingly strong report. Economists surveyed by MarketWatch had predicted a more modest 180,000 gain.
Hiring was strong almost across the board, with health care, hospitality and professional occupations leading the way.
The unemployment rate dipped to 3.5% from 3.6% to match the lowest level since the end of 1969.
The stock market DJIA, +1.10% soared in early Friday trades after the jobs report.
Read: Fed sees slight pickup in U.S. economy just ahead of the holiday season
What happened: Health-care providers hired 45,000 people, hotels and restaurants boosted staff by 45,000 and white-collar professional firms added 38,000 workers.
Employment in manufacturing jumped by 54,000, but almost all of the gains stemmed from General Motors GM, +0.92% employees returning to work after a month-long strike. Manufacturers have added virtually no jobs this year, hurt by a slowing global economy and by the U.S. trade war with China.
Read: U.S. manufacturing sector slumps further in November
Also lagging behind were retailers, construction firms and energy producers. Retailers added just 2,000 new jobs a month before the holiday shopping season. Builders filled just 1,000 positions. And oil-and-gas companies shed 7,000 jobs, reflecting lower energy prices.
The amount of money the average worker earns, meanwhile, rose 7 cents to $28.29 an hour. The increase in pay in the past 12 months slowed to 3.1% from 3.2%, however, indicating that many of the newly created jobs are likely lower-paying ones.
Wage gains climbed steadily from 2014 until early this year before leveling out at just over 3% a year.
Adding to the positive tone of the November jobs report, the government revised up employment gains for October and September by a combined 41,000.
Over the past three months, the economy had added an average of 205,000 new jobs. That’s down from a 223,000 average in 2018, but still quite vigorous more than a decade into an economic recovery.
Most economists don’t think it can last, though.
The slowing economy has caused some companies to scale back hiring while skilled and even unskilled labor has become hard to find in the tightest labor market in decades. Many firms say they have had to leave positions unfilled because of a lack of talent.
Read: U.S. tariffs on China have oddly little effect on import prices. What’s going on?
Big picture: Businesses are still hiring at a healthy pace and laying off very few workers. New applications for unemployment benefits fell again at the end of November, leaving them just slightly above a half-century low.
Read: U.S. jobless claims tumble again to 203,000 and return to near a 50-year low
The strong labor market has given consumers the confidence to keep spending and extend a U.S. economic expansion now in a record 11th straight year.
What they are saying?: “This was a strong report, with a solid rise in payrolls, another drop in the unemployment rate, and decent growth in hourly earnings,” said chief economist Chris Low of FHN FInancial.
“All these new jobs will only put an extra spring in the step of holiday shoppers,” said senior economist Sal Guatieri of BMO Capital Markets.
“Over 10 years since the official end of the Great Recession, the labor market continues to add more jobs than needed to keep up with population growth and the growth of the labor force,” said research director Nick Bunker of Indeed Hiring Lab. “As we start the new year, maybe our resolution should be to not count out this labor market.”
Market reaction: The Dow Jones Industrial Average DJIA, +1.10% and S&P 500 SPX, +0.94% both rose sharply, with the Dow gaining as much as 300 points. The 10-year Treasury yield TMUBMUSD10Y, +1.20% jumped 1.86%.