Joshua Lott / Reuters
People wait to be interviewed during a job fair in Phoenix, Ariz., held last month.
By msnbc.com news services
Employment growth picked up speed in November, pushing the nation’s unemployment rate down to 8.6 percent -- its lowest level since March 2009.
The Labor Department reported Friday that nonfarm U.S. payrolls increased by 120,000 last month, accelerating from October’s 80,000 gain and roughly matching analysts’ expectations. The U.S. jobless rate fell sharply from the prior month’s 9 percent level.
Private employers added a net gain of 140,000 jobs in November, but governments shed 20,000 jobs, mostly at the local and state level. Governments at all levels have shed nearly a half-million jobs in the past year. The Labor Department revised up its job gains for September and October by 52,000 and 20,000, respectively.
“The labor market is gradually healing. It’s a glacial pace, but we are taking small steps in the right direction,” said Ryan Sweet, a senior economist at Moody's Analytics in West Chester, Penn.
More than half the jobs added last month were by retailers, restaurants and bars, a sign that holiday hiring has kicked in. Retailers added 50,000, the sector's biggest gain since April. Restaurants and bars hired 33,000 workers. The health care industry added 17,000.
Still, a worrisome drop in the size of the U.S. workforce means that even with a big decline in the unemployment rate in November, it's still not time to break out the champagne.
The fall in the jobless rate was aided by 315,000 people leaving the workforce. That pushed the participation rate, a ratio of the amount of the population in the labor force, down to 64.0 percent.
Those who exited the workforce, many of whom gave up on looking for work, outnumbered the 278,000 people who found jobs, according the Labor Department's household survey, which is separate from payrolls data.
Even with the recent gains, the economy isn't anywhere close to replacing the jobs lost in the recession. Employers began shedding workers in February 2008 and cut nearly 8.7 million jobs for the next 25 months. Since then, the economy has regained nearly 2.5 million of those jobs.
The jobs report is unlikely to take much pressure off President Barack Obama, whose economic stewardship will face the judgment of voters next November. The outlook for the U.S. economy is also being threatened by Europe's ongoing financial crisis.
Speaking at a Washington, D.C., press event to promote a $4 billion effort to increase the energy efficiency of government and private sector buildings, Obama noted Friday that, despite some “strong headwinds,” the U.S. private sector has now added jobs for 21 months in a row.
“We need to keep that growth going,” he added.
The relative strength of the jobs report is in keeping with a recent trend, bolstered by upward revisions to the employment counts for September and October. But it is not seen as proving decisive for the U.S. Federal Reserve, which is weighing whether the recovery needs further monetary policy support.
Data ranging from manufacturing to retail sales suggest the pace of expansion could top 3 percent, in contrast to China, where growth is cooling and much of Europe, where growth has stalled.
While the economy's growth pace appears to have accelerated from the third quarter's 2 percent annual rate, Europe's festering debt crisis poses a big threat. At the same time, U.S. fiscal policy is set to tighten in the new year, even if lawmakers extend a payroll tax cut.
Taken together, some analysts believe the headwinds facing the U.S. economy will lead the Fed to ease monetary policy further by buying more bonds.
Though the economy emerged from recession two years ago, about 25 million Americans are either out of work or underemployed, a fact that is hurting Obama's chances of winning a second term.
Analysts say the economy needs to create at least 125,000 jobs every month just to keep the unemployment rate steady. So far this year, job growth has averaged 125,600 jobs a month. At that pace, it would take about 4-1/2 years for employment just to return to where it was when the recession started.
But there are reasons to be cautiously optimistic.
While the government's survey of employers has shown a still tepid pace of job growth, its separate poll of households that is used to calculate the unemployment rate has suggested more-robust jobs gains.
The Associated Press and Reuters contributed to this report.