The economy shed only 11,000 jobs in November, well below the 130,000 loss financial markets had braced for, while the unemployment rate unexpectedly dropped to 10 percent from October’s 10.2 percent, government data showed on Friday.
The data from the Labor Department signaled a broad-based improvement in the job market. In addition, job losses in September and October were revised down by a total of 159,000, contributing to the report’s strong tenor.
“It suggests that the labor market is much closer to its trough and more synchronized with broader measures of economic growth,” said Brian Fabbri, chief North America economist at BNP Paribas in New York.
Traders speculated the data could lead the Federal Reserve, which next meets on Dec. 15-16, to raise interest rates sooner than had been thought.
That sent the dollar soaring and pushed down prices for U.S. government debt. Against a basket of currencies, the dollar posted its biggest gain in nearly a year. <.DXY>
U.S. and European stocks jumped on the data. But the U.S. market later retreated slightly. The three major U.S. stock indexes ended higher, but off the 15-month highs hit earlier in the day, as investors began to fret over the potential dampening impact of higher rates.
“The economy is lifting at a much greater rate than expected,” said Chris Rupkey, chief financial economist at Bank of Tokyo/Mitsubishi UFJ in New York.
