December 2, 2016 at 3:00 PM
The U.S. economy added 178,000 jobs in November, while the unemployment rate fell to 4.6 percent, a level not seen since August 2007, according to government data released Friday morning. The first employment report since voters went to the polls last month shows an economy in strong shape as President-elect Donald Trump prepares to take office.
"It looks like firms are pretty bullish about what they're going to see in 2017 and are continuing their strong hiring of the past few years," said Steve Rick, chief economist at insurance company CUNA Mutual Group. "This is a good tailwind for the new administration."
Democrats seized on the report as evidence that President Obama had cultivated a much more robust economy that Trump would now take over.
"It is hard to imagine a more stark contrast between the economy that we are passing off to our successor and the economy we inherited," said Christopher Lu, the deputy secretary of the Labor Department.
The data comes a day after Trump celebrated a deal in Indiana to preserve about 1,000 jobs at a furnace factory run by Carrier, a unit of United Technologies, saying he planned to intervene more frequently in corporate decisions to move jobs overseas. Carrier had planned to move a factory to Mexico, but partially relented under pressure from Trump and a $7 million tax subsidy from the state.
On a conference call on Friday morning, a Trump transition team spokesperson called the decline in manufacturing jobs, wages and the labor force participation rate in November evidence of Obama's failures, but said Americans were already looking forward to Trump's economic stewardship.
"What we're starting to see now is a new sense of optimism," said spokesman Jason Miller. "This incoming administration is one that is going to fight even before formally taking office to keep American jobs."
Data released on Friday showed a sharp drop in the unemployment rate from 4.9 percent the previous month, driven partly by the creation of new jobs and partly by people retiring and otherwise leaving the labor force.
A broader measure of unemployment, the U-6 rate, which includes those who have given up looking for work and part-time workers who would like to have full-time jobs, fell to 9.3 percent, the lowest reading since April 2008. The figure still remains elevated from average levels in the 2000s.
Average hourly earnings declined by 3 cents to $25.89, paring back large gains in October. That drop surprised some economists, who were expecting a tighter labor market to continue to translate into wage gains for workers. But economists cautioned that month-to-month changes can be volatile and that, over the year, average hourly earnings are up 2.5 percent.
The report was largely in line with investor expectations, and stock markets were down slightly in mid-afternoon trading. Revisions to the job figures for September and October did not significantly alter previous data, removing only 2,000 jobs in total.
The release comes ahead of the Federal Reserve's Dec. 13-14 meeting, when the central bank is expected to announce its first interest rate increase in a year. Although wages fell slightly in November, many economists view the steady wage gains of the earlier months as a sign that a tightening labor market is allowing workers to demand higher pay, increasing pressure on the Fed to head off inflation by hiking interest rates.
Trump has promised to spend heavily to rebuild America's infrastructure. If realized, the plan would likely add more jobs to business payrolls and boost spending, consumer confidence and inflationary pressure throughout the economy.
Trump surged to an electoral victory largely on the support of white, working-class voters fearful of job losses, especially in blue-collar industries like manufacturing and mining. He has pledged to restore good-paying manufacturing jobs to the United States.
That promise could be difficult to achieve, given the continuing trend toward automation and decades-long shift of the economy away from manufacturing and toward the service sector, said Jed Kolko, chief economist at job search site Indeed.
In November, construction, professional and business services, and health care were among the strongest-performing sectors of the economy, but manufacturing industry jobs declined compared with the previous month and one year ago. "To bring back manufacturing jobs means overcoming some pretty strong headwinds," said Kolko.
The jobs report contained further clues that Americans with skills and education are having little trouble finding work, but that those without continue to struggle. The unemployment rate for Americans with a bachelor's degree or higher dipped to 2.3 percent in November, but the rate for those with less than a high-school diploma rose to 7.9 percent.
"When you drill down into the data [for] more educated workers, you see an unemployment rate that's pretty nice, and in recovery mode," said Beth Ann Bovino, U.S. chief economist at S&P; Global. "But people with a high school education are still really hurting. That's certainly a concern for them and their families, but also the recovery going forward."
The November jobs report was also one of the final snapshots of the economy under Obama's administration. The picture was dramatically different from Obama's first months in the White House, when the private sector was shedding roughly 800,000 jobs a month and the unemployment rate was at 10 percent.
During Obama's term as president, the U.S. economy "went from being in intensive care to walking under its own power," said Mark Hamrick, Bankrate.com's senior economic analyst. "It might even be jogging at this point."