WASHINGTON (AP) — A resurgence in U.S. hiring accelerated in November and put 2014 on track to be the healthiest year for job growth since 1999.
The gain of a robust 321,000 jobs – the most in nearly three years – put further distance between a strengthening American economy and struggling nations throughout the developed world.
The job market still isn’t yet fully healthy. But its steady improvement raises the likelihood that the Federal Reserve will start raising interest rates from record lows by mid-2015.
The unemployment rate remained at a six-year low of 5.8 percent, the Labor Department said Friday.
“These were boom-like numbers,” said Mark Zandi, chief economist at Moody’s Analytics. “They indicate that the U.S. economy is on very solid ground.”
Friday’s report also raised hopes that Americans’ pay might finally be starting to increase after barely budging since the Great Recession began seven years ago. The average hourly wage rose 9 cents to $24.66, the biggest gain in 17 months.
Fed Chair Janet Yellen has cited stagnant wages as a key reason to keep rates low. Higher wages could lead to higher prices, and the Fed might feel compelled to raise rates to limit inflation.
Still, over the past 12 months, hourly pay has risen just 2.1 percent, barely above the 1.7 percent inflation rate. And economists note that inflation remains below the Fed’s 2 percent target and will likely stay tame because of lower energy prices. That might give the Fed some leeway to wait.
The Fed has kept its benchmark rate near zero for six years to encourage borrowing and spending.
Investors welcomed Friday’s news: The Dow Jones industrial average rose 58 points to close at 17,958. Earlier in the day, the Dow came within 9 points of crossing the 18,000 mark for the first time. The yield on the 10-year Treasury note rose to 2.31 percent, from 2.25 percent, a sign that investors foresee a Fed rate increase relatively soon.
So far this year, the economy has gained 2.65 million jobs. With a month to go, 2014 is already the best year for hiring in 15 years.
That is partly a reflection of the anemic pace of job growth for much of the recovery. Only this year, five years after the recession officially ended, have job gains neared levels historically associated with a strong economy. In the 1980s and 1990s, employers regularly added more than 3 million jobs a year.
Even now, signs of weakness remain: There are 6.9 million people with part-time jobs who would prefer full-time work – up from 4.1 million before the recession.
And millions have given up looking for work. That has been a factor in the declining unemployment rate: Once people stop seeking a job, they’re no longer counted as unemployed.
A broader measure of unemployment, which includes involuntary part-time workers and people who given up looking, stands at 11.4 percent.
In addition, the number of unemployed people who have been out of work for more than six months is 2.8 million, more than double its pre-recession level.
“At this rate, we won’t return to pre-recession labor market health until October 2016 – nearly nine years since the recession began,” said Elise Gould, an economist at the liberal Economic Policy Institute.
Many Americans remain anxious about the economy. In a Gallup poll last month, 30 percent said the economy was “poor,” compared with 24 percent who said it was “good” or “excellent.” Americans who earn above $90,000 had a much brighter outlook than those who earn less.
Even among Americans who have found jobs, many are earning less than they did before the recession.
One of them is Stephen Tripp, 40, who’s starting a job this month in the Minneapolis area as a cook at Aramark, a corporate food-services provider, after years of intermittent work at country clubs and restaurants. The job pays much less than the $75,000 he made as an executive chef in 2007. But he expects higher-paying positions at the company will open soon.
“I’m kind of taking steps back in the hopes of moving forward,” Tripp said.
Seasonal hiring related to the holiday shopping season helped lift the overall gains. Retailers added 50,200 jobs, the most in 11 months. Transportation and warehousing gained 16,700.
Shipping companies have announced ambitious plans, after some holiday gifts ordered online arrived late last year. UPS has said it expects to add up to 95,000 seasonal workers, up from 85,000 last year. FedEx plans to hire 50,000, up from 40,000.
But the hiring was broad-based: A measure of industries that added jobs reached its highest point since 1998.
Manufacturers added 28,000 jobs, the most in a year, and education and health services 38,000. Professional and technical services, a category that includes higher-paying jobs such as accountants, engineers and architects, gained 37,500 positions, the most in 3 1/2 years. Construction firms added 20,000.
The hiring surge comes after the economy expanded from April through September at its fastest six-month pace in 11 years. Many analysts foresee the economy growing 3 percent next year. If so, 2015 would mark the first time in a decade that annual growth reached that threshold.
Overall, the improving U.S. job market contrasts with weakness elsewhere around the globe. Growth among the 18 European nations in the euro alliance is barely positive, and the eurozone’s unemployment rate is 11.5 percent.
Japan is in recession. China’s growth has slowed. Other large developing countries, including Russia and Brazil, are straining to grow.
The U.S. economy is less dependent on exports than are Germany, China and Japan. American growth is fueled more by its large domestic market and free-spending consumers.
Most of the industries that have enjoyed the strongest job gains depend on the U.S. market, such as retailers, restaurants, education and health care.