The U.S. unemployment rate for November fell to 7 percent, the lowest it's been in five years, the U.S. Bureau of Labor Statistics said Friday.
Employers added 203,000 jobs last month. Transportation and warehousing, health care and manufacturing have all added jobs last month. The average work week and hourly earnings for employees also increased.
The numbers, a sign of economic growth, were unexpected. Economists predicted the November unemployment rates falling from 7.3 to 7.2 percent, and non-farm payrolls increasing by only 108,000, The Wall Street Journal reported.
The low unemployment rate increases the expectation that the Federal Reserve will reduce bond purchases this month. In September 2012, the Fed began buying bonds at $85 million a month. The purpose was to help keep interests rates low and boost hiring, The Wall Street Journal reported. The unemployment rate has decreased since the Fed started buying the bonds.
Authorities at the Fed October meeting hoped to scale back the purchases in the near future. That could happen at the next meeting in December, but economists are skeptical.
"The U.S. labor market is still far from healed, but certainly is moving in the right direction," Eric Stein, portfolio manager at Eaton Vance Investment Managers in Boston, told Reuters. "This number puts a December taper on the table, but it isn't a certainty."
The Fed is also hesitant to say the unemployment rate is a definite sign they should halt bond purchases.
"December is certainly a meeting where the issue can be addressed, but I want to be quite confident," Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, told The Wall Street Journal.
Though the overall economic outlook is good, consumer spending did not fare so well. According to the Wall Street Journal, The Commerce Department said consumer spending rose only 0.1 percent, the same rate it's increased over four months.
