Job seekers attend a career fair at Rutgers University. Credit: Reuters
U.S. employers hired more workers than expected in November, with the jobless rate falling to a five-year low of 7.0 percent, which could fan speculation the Federal Reserve could start reducing its bond purchases this month.
Nonfarm payrolls increased by 203,000 new jobs last month, the Labor Department said on Friday.
The unemployment rate dropped three tenths of a percentage point to its lowest level since November 2008 as some federal workers 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 35-1/2-year low touched in October.
The closely watched employment report was released little more than a week before the Fed's Dec. 17-18 policy-setting meeting.
The stronger-than-expected reading on job growth in November could stir speculation the central bank might reduce its current pace of bond purchases this month, but most economists feel the Fed will want further signs of economic progress before acting.