WASHINGTON (AP) — The U.S. economy generated another month of solid hiring in November, making it highly likely the Federal Reserve will raise interest rates from record lows later this month.
The Labor Department said Friday employers added 211,000 jobs last month, led by big gains in construction and retail. Hiring was revised higher in October and September by a combined 35,000 jobs.
The unemployment rate remained 5 percent for the second straight month as more Americans entered the workforce to look for jobs.
The robust hiring is the latest sign that steady consumer spending is powering the economy even as weak growth overseas and low oil prices squeeze manufacturers. Fed Chair Janet Yellen said this week the job market would soon return to normal as long as the economy keeps growing at its current pace. Her remarks were widely seen as signaling a likely rate hike at the Fed’s mid-December meeting.
Pay gains last month were modest. Average hourly wages rose 2.3 percent from 12 months earlier.
Construction firms added 46,000 jobs, the most in two years. Construction spending has jumped to the highest level in eight years, boosted by more homebuilding and development of more roads and infrastructure.
Government added 14,000 positions, and retail jobs grew nearly 31,000. 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.