Unemployment Drops to 9-Year Low of 4.6 Percent in November Jobs Report

In the final jobs report of 2016 from the Bureau of Labor Statistics , the economy added 178,000 jobs and unemployment dropped to 4.6 percent after remaining relatively constant for the last year. This marks a nine-year low for the unemployment rate, as it falls back to a level the country hasn't seen since August 2007, before the financial crisis.

But while this milestone may feel momentous, the real message of the job report is "business as usual." Over the last three months, the economy has added 176,000 jobs per month — a figure widely regarded as good, but not great.

"We now have all but the final chapter of the jobs report book for 2016," said Bankrate Senior Economic Analyst Mark Hamrick in an email. "While we can’t say flatly that the story has a happy ending, the tone remains fairly upbeat, particularly with the unemployment rate plunging to 4.6%. The pace of hiring is in line with expectations."

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One major caveat to the upbeat headline figures is the labor force participation rate, which measures the total number of people working or looking for work. It dropped 0.1 percent to 62.7 percent — hardly a dramatic shift but enough to dampen enthusiasm about a 0.3 percent decline in the unemployment rate. Overall, though, the labor participation rate has remained relatively constant in recent months.

Hourly wage growth is up 2.5 percent in the last year, but November's numbers show a 3-cent drop in average hourly wages to $25.89.

"While the headline figure for job growth is a positive, both labor force participation and wage growth declined," said Chief Economist Curt Long from the National Association of Federal Credit Unions.

"Still, the report provided no impediments for a rate hike from the Fed later this month, and a quarter-point increase is now a certainty," he added.

Hamrick agreed. "Absent a truly unexpected event between now and mid-December, the Federal Reserve is virtually certain to raise interest rates for the first time in a year," he said.

So what's the major takeaway?

"Between surging consumer confidence levels, a booming stock market and home prices back above pre-recession levels, a number of boxes indicative of a healthy economy are being checked-off," Hamrick said. "Beneath these broad brushstroke trends, the election provided a dramatic demonstration that not everyone has personally experienced the benefits of the economic recovery which began in 2009. Addressing that divide is the huge challenge facing President-elect Donald Trump."

Photo credit: Neetalparekh via Flickr