Unemployment drops to 4.6 percent

Unemployment drops to 4.6 percent
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The unemployment rate dropped to 4.6 percent in November, according to numbers released Friday, the lowest in nine years.

The U.S. economy added 178,000 jobs last month, and the unemployment rate dropped to the lowest level since August 2007, which is before the recession started, the Labor Department said.  

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President Obama is handing President-elect Donald TrumpDonald John TrumpFamily immigration detention centers could be at capacity within days: report Trump likely to meet with Putin in July: report DOJ requests military lawyers to help prosecute immigration crimes: report MORE an economy that has been producing jobs for more than six years, a pre-recession unemployment rate and steady wage growth that is expected to pick up next year.

The White House highlighted that U.S. businesses have added 15.6 million jobs since early 2010.

Jason FurmanJason FurmanTrump signals jobs data before report's release, breaking with protocol Overnight Finance: Unemployment rate lowest since 2000 | Trump asks China to slash trade deficit 0B by 2020 | NJ gov signs bill to skirt GOP tax law provision Economy adds 164K jobs in April, unemployment lowest since 2000 MORE, chairman of the Council of Economic Advisers, said the pace of jobs growth remains substantially higher than the 80,000 jobs per month that is necessary to maintain a stable unemployment rate.

With only one more jobs report remaining in the Obama administration, Furman turned the focus away from the Trans-Pacific Partnership, which the president had hoped to complete this year, and to “opening new markets to U.S. exports” as well as “taking steps to spur competition to benefit consumers, workers and entrepreneurs; and raising the minimum wage” to keep the economy moving. 

With a tightening labor market, Trump will have to find a way to keep the economy expanding and jobs growth marching along. 

“Between surging consumer confidence levels, a booming stock market and home prices back above pre-recession levels, a number of boxes indicative of a healthy economy are being checked-off,” said Bankrate.com senior economic analyst Mark Hamrick.

“Beneath these broad brushstroke trends, the election provided a dramatic demonstration that not everyone has personally experienced the benefits of the economic recovery which began in 2009,” Hamrick said. 

“Addressing that divide is the huge challenge facing President-elect Donald Trump.”

The president-elect, who touted this week how he saved more than 1,000 jobs at Carrier’s furnace plant in Indiana, vowed to make life very difficult for U.S. companies that want to ship jobs overseas in his efforts to protect American workers and jobs. 

“While I’m glad to see more gains in employment, it looks like the unemployment rate fell in part because many people gave up looking for work,” said House Ways and Means Committee Chairman Kevin BradyKevin Patrick BradyLawmakers, businesses await guidance on tax law On The Money: Trump imposes B in tariffs on China | China blasts 'fickle' Trump, promises payback | Trump to name consumer bureau director next week Trump announces tariffs on billion in Chinese goods MORE (R-Texas).

“I’m very pleased that the incoming Trump administration is already making it clear that job creation and economic growth are their top priorities,” Brady said. 

The 4.6 percent jobless rate represented a drop of 0.3 percentage points, and the number of unemployed persons declined by 387,000, to 7.4 million. 

But some people gave up looking for work — about 226,000 left the labor force, and the participation rate declined to 62.7 percent, the lowest since June.

Plus, the pace of wage growth fell last month to 2.5 percent after a strong showing in October. 

“If the job market continues to heal next year as is widely expected, it is reasonable to expect that we’ll see better news on wages,” Hamrick said. 

Justin Wolfers, an economist at the University of Michigan, said that the jobless rate fell because "job growth has been ahead of population growth for a while and that undoes the puzzle of why it hadn't already fallen."

This year, hiring has averaged 180,000 jobs a month, compared with an average monthly increase of 229,000 in 2015, a sign that the job market is tightening.

The economy expanded at a faster 3.2 percent pace in the July-September quarter and, so far, an uptick in holiday sales looks to be fueling a strong finish to the year. 

The Fed is widely expected amid faster economic growth and a tightening labor market to raise the benchmark interest rate for the first time in a year. 

“November was a bit of a mixed bag as far as jobs were concerned,” said Curt Long, chief economist for the National Association of Federal Credit Unions.

"Still, the report provided no impediments for a rate hike from the Fed later this month, and a quarter-point increase is now a certainty."

Employment in construction continued on its recent upward trend in November, adding 19,000 jobs bolstered by the addition of 15,000 jobs in residential construction. In the past 3 months construction has added 59,000 jobs, largely in residential construction as building picks up. 

Meanwhile, mining added 2,000 while manufacturing shed 4,000, the fourth straight month of declines in the sector. 

“Moving forward, manufacturing leaders are cautiously optimistic about demand and production for 2017, and we would expect that this increase in activity would lead to additional hiring,” said Chad Moutray, chief economist for the National Association of Manufacturers. 

Jobs in professional and business services rose by 63,000 in November and have risen by 571,000 over the year. 

Healthcare employment rose by 28,000 in November and in the past year has added 407,000 jobs.

Jobs growth were 2,000 less than reported for the previous two months, although September’s figures did eclipse 200,000. 

— Updated at 9:56 a.m.