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.
The Labor Department said Friday that employers added 211,000 jobs, led by big gains in construction and retail. 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 rising 200 points a half hour after trading began. The yield on the 10-year Treasury note was little changed at 2.3 percent.
Fed Chair Janet Yellen said this week that the economy appeared to be improving enough to justify a rate hike as long as no major shocks undermine 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.
For the Fed, conditions seem nearly ideal for a period of small and only gradual rate increases in coming months: Job growth has been consistently solid, and wages have begun to rise but not so much as to cause concern about future high inflation.
Since the Great Recession ended 6½ years ago, 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.
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.
Steady job gains this year and low mortgage rates have also boosted home sales, though sales have leveled off in recent months. Purchases of existing homes have increased nearly 4 percent from a year ago. Sales of new homes have jumped nearly 16 percent.
Americans are eating out more often, driving restaurant sales much 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 next year should the Fed raise interest rates even as its counterparts overseas, such as the European Central Bank, cut them further. Higher rates would attract investors to the dollar, driving up its value.
Separately, falling oil prices have cut factory output as drilling companies have ordered less steel pipe and other materials, such as fracking sand. Businesses overall have cut back on investing in computers and equipment this year.
The economy expanded at a modest 2.1 percent annual rate in the July-September quarter. Most economists have forecast that it will grow at a still relatively subpar 2.5 percent this year, only slightly above its average pace since the recession officially ended in mid-2009.