WASHINGTON — The U.S. economy generated another month of solid hiring in November, making it highly likely that the Federal Reserve will raise interest rates from record lows this month.
Employers added 211,000 jobs last month, led by big gains in construction and retail, the government said Friday. And the government revised up its estimated job growth for September and October by a combined 35,000.
The unemployment rate remained a low 5 percent for a second straight month. More Americans began looking for jobs in November, and most found them.
Employers have now added an average 213,000 jobs a month over the past six months. The robust hiring indicates that consumer spending is powering the economy even as weak growth overseas and low oil prices squeeze U.S. manufacturers and drillers.
Investors cheered the jobs report, with the Dow Jones industrial average jumping nearly 250 points in midday trading. The yield on the 10-year Treasury note was little changed at 2.29 percent.
This week, Fed Chair Janet Yellen said the economy appeared to be improving enough to justify a rate hike as long as no major shocks undermined confidence before the Fed meets Dec. 15-16. The Fed has kept its key short-term rate at a record low near zero for seven years. But as the economy has gradually improved since the Great Recession ended 6½ years ago, the need to keep borrowing rates at emergency-level lows has subsided.
For the Fed, conditions seem nearly ideal for a period of small and only slow rate increases in coming months: Job growth has been solid, and wages have begun to rise but not so much as to cause concern about future high inflation.
Since the recession ended, average hourly pay has grown at only about two-thirds of the pace typical of a healthy economy. In November, average hourly wages rose 2.3 percent from 12 months earlier. The November jobs report shows that the U.S. economy "is strong enough to withstand an initial hike in interest rates from what were seen as emergency record-low levels," said Chris Williamson, chief economist at Markit. "A December rate hike now looks to be in the bag."
Job gains were broad-based across the economy in November. Construction companies added 46,000 jobs, the most in two years. Spending in that sector has reached its highest level in eight years, boosted by more homebuilding and development of more roads and infrastructure.
The sizable gain in construction jobs last month, even as the Fed is preparing to raise rates, suggests that few expect higher borrowing costs to derail home building or sales.
"It was heartening to see growth in construction and that manufacturing held steady as ... both are sensitive to higher interest rates," said Tara Sinclair, chief economist at job search site Indeed.com.
Government added 14,000 positions in November, retailers nearly 31,000. But factories shed 1,000 jobs.
Some who have recently looked for work report more success than they encountered in previous job hunts. One of them is Sarah Raminhos, who said she felt confident enough this time to turn down job offers before starting a new position at a small accounting company in Bethesda, Maryland.
"This time, I felt like I could be a more picky," said Raminhos, 29. "There seemed like there were quite a few opportunities."
With more jobs and long-awaited, if still modest pay increases, Americans are spending more on costly items like cars and homes. Their stepped-up spending has supported the U.S. economy and offset drags from falling oil prices and weak growth overseas.
Auto sales, for example, jumped to a 14-year high in November, boosted in part by Black Friday deals offered throughout the month. Industry analysts expect auto sales to total a record 17.5 million for 2015.
Job gains this year and low mortgage rates have also boosted home sales, though sales have leveled off. Purchases of existing homes have increased nearly 4 percent from a year ago. Sales of new homes have jumped nearly 16 percent.
A healthier housing sector has benefited Genpact, a New York City-based company that provides mortgage processing services to companies. CEO Tiger Tyagarajan says Genpact has added about 400 people to its 4,000 person U.S. workforce this year, many of them in highly skilled areas such as software programming and management consulting.
"The U.S. economy seems to be steady, and that's good because that means we have to hire more," Tyagarajan said.
Still, Genpact hasn't felt compelled to boost pay. Instead it's stepped up training and recruiting and is seeking to make it easier for employees with families to work part time.
Americans are eating out more often, driving restaurant sales higher. Retailers have reported weak revenue in recent months, but online purchases were robust on Black Friday.
Still, a strong U.S. dollar is weighing on U.S. exports and cutting factory output, while also lowering profits for U.S. multinational corporations. The dollar has jumped 13 percent in value in the past year, thereby making U.S. goods costlier overseas and imports cheaper in the United States.
The dollar could rise further should the Fed raise rates even as its counterparts overseas, such as the European Central Bank, cut them further. Higher rates would attract investors to the dollar, boosting its value.