By Sarah Chaney 

WASHINGTON -- The U.S. job market strengthened in November, as hiring jumped and unemployment fell to a half-century low, adding fuel to the economic expansion.

Employers added 266,000 jobs in November -- the fastest pace since 312,000 in January -- and the jobless rate dipped to 3.5%, matching September as the lowest level since 1969, the Labor Department said Friday. Wages also advanced 3.1% from a year earlier.

"This is a 'who would have thought moment?'" said Becky Frankiewicz, president of staffing company ManpowerGroup's North America division. "No one would have ever guessed we could be sitting at 3.5% unemployment with 110 months of job gains."

U.S. stocks and government-bond yields rose Friday after the upbeat jobs report, offsetting some of the jitters about trade from earlier this week.

Jobs have grown an average 205,000 a month in the three months through November, a pickup from the pace earlier in the year but less than 223,000 a month in 2018. The stronger pace of hiring could help juice up the broader U.S. economy, which is still expanding but at a slower pace than last year.

Employers in November added jobs across several industries, including health care, leisure and hospitality and transportation.

Consumers have been a key driver propping up economic growth while business investment and manufacturing have faltered. Evidence suggests the resilience of households is poised to continue. Americans' view of the economic outlook improved significantly in December, according to a University of Michigan consumer-sentiment survey released Friday.

"If you look at the consumers, they're actively showing with their wallets that they're interested in sales," said Tim Hinckley, chief commercial officer at Radial, a company that provides warehousing and software services to large clothing and shoe retailers.

He said such consumer strength is helping underpin growth at Radial, which seeks to add on about 5% more employees at its fulfillment and call centers this holiday season compared with last year.

The Federal Reserve has cut interest rates three times this year on worries that weakness in trade, business investment and manufacturing could derail U.S. growth by triggering cutbacks in spending and hiring. The central bank, which meets next week to discuss interest rates, has signaled it was done cutting rates unless it sees a significant slowdown in economic activity.

The economy has continued to plug along, but has pulled back from last year's robust pace. Gross domestic product, a broad measure of goods and services across the economy, increased at a 2.1% annual rate in the third quarter, down from a 2.9% rate for 2018 as a whole.

U.S. manufacturing activity also has cooled this year, a reflection of trade-war uncertainty and a global manufacturing slowdown.

General Motors Co. workers, who were on strike in October, helped drive a bounceback in manufacturing payrolls in November. Still, manufacturing employment growth has slowed to a crawl in recent months. Manufacturing jobs were up 0.6% in November compared with a year earlier, down from a recent peak of 2.3% growth in mid-2018.

Dan Digre, president of Misco Speakers, a St. Paul, Minn.-based manufacturer of speakers and audio systems, said the 100-person company has kept its staff size stable this year. While business demand for speakers is still strong, tariffs on speaker parts imported from China are eating into money available for labor.

"If the tariffs weren't in place, we would be looking to hire," said Mr. Digre. "I hope I don't have to lay off people because that's like the last thing you want to do."

Historically, low unemployment hasn't translated into an acceleration in wage gains. Wages were up 3.1% from a year earlier, down from a recent peak of 3.4% in February. While wage gains still well outpace inflation, they remain modest relative to other periods with historically low unemployment.

Wages are growing faster for rank-and-file workers than the overall labor force. Further pickup in pay could be a key lever behind faster labor-force growth, which would help fill some employers' appetite for workers at a time of low unemployment.

Mosquito Joe, a pest-control franchise based out of Virginia Beach, Va., was flooded with new orders for its services this summer. Bulking up with office managers and new employees to spray pesticides in yards proved more challenging than in years past, said Lou Schager, president of Mosquito Joe.

"We're having more candidates applying, and then not showing up for the interview," Mr. Schager said. "They think they can be more selective."

To make sure that staff will return during the busier summer months, some Mosquito Joe locations are keeping workers on through the winter, even if it is just a few days a month to maintain equipment or connect with customers. Franchisees have raised wages by at least 3% and offered bonuses to workers, Mr. Schager said.

--Eric Morath contributed to this article.

Write to Sarah Chaney at sarah.chaney@wsj.com

 

(END) Dow Jones Newswires

December 06, 2019 13:28 ET (18:28 GMT)

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