The U.S. economy added 178,000 jobs in November,Â and the unemployment rateÂ fell to 4.6Â percent from 4.9 percent the previous month,Â according to new government data released Friday morning. TheÂ first employmentÂ report since voters went to the polls last month shows an economy in strong shape as President-elect Donald Trump prepares to take office.
The unemployment rate fell to levels not seen since August 2007, before a bubble in the U.S. housing market began to burst. The fall was driven partly by the creation of new jobs and partly by people retiring and otherwise leaving the labor force.
âOverall, itâs a labor market that is continuing to improve, that has a decent momentum,â said Josh Feinman, chief global economist at Deutsche Asset Management. âSo thatâs certainly encouraging.â
Democrats seizedÂ on the report as evidence that President Obama had cultivated a much more robust economy that Trump would now inherit. It comesÂ a day after Trump celebrated a deal in IndianaÂ 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.
Average hourly earnings declined by 3 cents to $25.89, paring back large gains in October. Still, over the year, average hourly earnings are still up 2.5 percent, the Bureau of Labor Statistics said.
The data 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 viewÂ the steady wage gains of the earlier months as a signÂ that a tightening labor market is allowing workers to demand higherÂ pay, increasing pressure on the Fed to head off inflation by hikingÂ interest rates.
Trump has promised to spend heavily to rebuild America’s infrastructure, plans that may also createÂ jobs and increase inflationary pressure in coming months.
Trump surged to an electoral victory largely because of 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, a promiseÂ economists say will be difficult to achieve given the increasing role of automation in manufacturing.
While Trump boasted of the jobs saved in Indiana, the challenge going forwardÂ is the continued loss of manufacturing jobs, said Jed Kolko, chief economist at job search site Indeed. The latestÂ report indicated manufacturing jobs had fallen from both the previous month and November 2015.
“To bring back manufacturing jobs means overcoming some pretty strong headwinds,” said Kolko.
The November jobs reportÂ was also one of the final snapshots of the economy under President Obama’s administration.
While some economists note that America’s labor force participation rate remains low and broader measures of unemployment are still elevated, the data captured an economy that has bounced back from Obama’s first months in office, when the private sector was shedding roughly 800,000 jobs a month and the unemployment rate was at 10 percent.
“[I]tÂ would be harder to paint a starker contrast” between the beginning of Obama’s term and today, says Feinman. “The economy has made enormous progress.”