AILSA CHANG, HOST:
The American job market shows no sign of slowing; if anything, it's picking up steam. U.S. employers added a whopping 266,000 jobs last month. That is the biggest jump since the beginning of the year. The jobs report was an early Christmas gift for Wall Street, where stock indexes jumped sharply. The Dow Jones Industrial Average rose more than 330 points. NPR's Scott Horsley reports.
SCOTT HORSLEY, BYLINE: The U.S. economy has now been adding jobs for a record 110 months in a row. At this point, it would not be surprising to see some drop-off in hiring, but that's not what the Labor Department found in November.
TOM PHILIPSON: That's a tremendous report.
HORSLEY: White House economist Tom Philipson notes job gains for the two previous months were also revised up by a total of 41,000. Since September, American employers have created an average of 205,000 jobs every month. Philipson says that's a marked increase from earlier this year.
PHILIPSON: It's really picking up relative to what we've seen so far this year. So obviously, it's something we're very happy about.
HORSLEY: The vast majority of November's jobs gains were in service industries, such as health care and restaurants. Economist Nick Bunker of the Indeed Hiring Lab says these are businesses that tend to be insulated from global shocks, like the president's trade war.
NICK BUNKER: Their customers are here in the U.S., and the U.S. consumer is still strong, and that's feeding into steady and stable employment growth for those industries.
HORSLEY: Manufacturers, on the other hand, are not so immune to global forces. Other surveys have shown manufacturing to be slumping in recent months.
BUNKER: These are industries that are more exposed to the global economy, which has slowed down considerably this year.
HORSLEY: The jobs report showed a jump in manufacturing employment last month, but three-quarters of that was auto workers who'd been temporarily idled the month before by the UAW strike at General Motors. The unemployment rate dropped in November to just 3.5%, matching its lowest level in nearly 50 years. Despite that low unemployment rate, Bunker says wage gains remain fairly modest. Average wages have risen just 3.1% over the last year.
BUNKER: Wage growth definitely continues to be the disappointment of jobs reports.
HORSLEY: Wage growth was somewhat higher earlier in the year, but Philipson says even a 3% pay raise is more than enough to outpace inflation.
PHILIPSON: We are actually seeing stronger real wage growth last year than we've seen before because inflation is ticking down. If you look at the purchasing power of that wage, it has increased the last year because prices have come down.
HORSLEY: What's more, Philipson says, wage growth has been strongest at the bottom of the income ladder.
PHILIPSON: Prior to Trump, workers' wages were growing slower than managers'. Now it's the exact opposite - that the disadvantaged groups are growing faster.
HORSLEY: One factor that may be keeping a lid on wages is the steady flow of new workers entering or reentering the labor force. Bunker says that means the job market may not be quite so tight as the rock-bottom unemployment rate would indicate.
BUNKER: As the labor market has gotten stronger, it's been pulling workers off the sideline. And that's one of the great trends of this recovery, is people, particularly in groups that are historically disadvantaged in the labor market, are getting more opportunities as employers are looking to fill positions, and they're going out and pulling workers in.
HORSLEY: Hundreds of thousands of new workers joined the labor force in October, for example. But last month, that flow of new workers dropped off sharply. That could be just a temporary lull or a sign that, after more than nine years of job gains, the U.S. economy really is nearing full employment.
Scott Horsley, NPR News, Washington.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.