A smashing November jobs report tempered fears of a looming recession and snuffed out any expectations of another Federal Reserve interest rate cut at its meetings on Dec. 10 and 11.
Total nonfarm payroll employment in the U.S. spiked by 266,000 jobs in November, data from the U.S. Bureau of Labor Statistics showed, significantly beating the consensus economist estimates that had been in the 180,000-185,000 range.
Unemployment dipped one-tenth of a percentage point from October to 3.5%, the lowest rate in 50 years. The labor force participation rate ticked down by one-tenth of a percentage point as well, to 63.2%.
The U.S. labor market proved "remarkably resilient" despite continued worries over trade battles and weaker global growth, Leslie Preston, senior economist at TD Economics, wrote in a research note.
The report means the Federal Reserve "can sit comfortably on the sidelines" at its upcoming meeting on Dec. 11 after cutting rates three times this year.
"As long as international risks do not intensify and hurt confidence domestically, the American economy will remain in expansion, supported by a healthy consumer," Preston wrote.
The monthly job growth was the best since January and was in part driven by a 45,000-job boost each in the healthcare and hospitality sectors.
It also got a lift from a rise in motor vehicles and parts employment, which jumped by 41,000 jobs in November and reflected the return of General Motors Co. workers who had previously been on a six-week strike, the BLS said. Overall, manufacturing jobs picked up by 54,000 in November after falling by 43,000 in October.
Ryan Sweet, director of real-time analytics for Moody's Analytics, said even after stripping out the boost from the GM strike, job growth was "very strong" in November.
"This pace isn't sustainable, but trend job growth and the unemployment rate suggest that there isn't anything wrong with the labor market," Sweet said in an interview. "It appears that the Fed has pulled off a soft landing for the economy."
Stocks reacted well to the report.
The Dow Jones Industrial Average was up 264.82 points to 27,942.61 as of 10:38 a.m. ET, while the S&P 500 was up 25.87 points to 3,143.30.
The strong November report follows a slightly less-impressive jobs report from October, though that month's 128,000 added jobs had also topped economists' expectations. The U.S. has added an average of 180,000 jobs each month this year, the BLS said.
Meanwhile, average hourly earnings rose 3.1% on a yearly basis in November, topping market expectations of 3.0% annual growth but dipping down from October's year-over-year growth rate of 3.2%.