WASHINGTON (AP) — The U.S. economy added 146,000 jobs in November and the unemployment rate fell to 7.7 percent, the lowest since December 2008. The drop, however, was largely due to the fact that more discouraged Americans stopped looking for work and weren't counted as unemployed.
The Labor Department's report Friday offered a mixed picture of the economy.
Hiring remained steady during Superstorm Sandy and in the face of looming tax increases. But the government said employers added 49,000 fewer jobs in October and September than it initially estimated.
And economists noted that the unemployment rate would have risen if more people hadn't stopped looking for work. Once people without jobs stop looking for one, they're no longer counted as unemployed
The report "is something of a mixed bag but, on balance, it's a positive," said Paul Ashworth, an economist at Capital Economics.
The job growth suggests that most employers aren't yet delaying hiring because of the "fiscal cliff." That's the combination of sharp tax increases and spending cuts set to take effect next year unless the White House and Congress reach a budget deal before then.
There is "no obvious impact from the looming fiscal cliff yet," Ashworth added, "but it could still have a greater effect on December's figures."
Sandy's effect on the economic figures was much smaller many analysts had predicted. The government noted that as long as employees worked at least one day during a pay period — two weeks for most people — its survey would have counted them as employed.
Still, there were signs that the storm disrupted economic activity. Construction employment dropped 20,000. And weather prevented 369,000 people from getting to work — the most for any month in nearly two years. These workers were still counted as employed.
All told, 12 million Americans were unemployed in November, about 230,000 fewer than the previous month. That's still many more than the 7.6 million who were out of work when the recession officially began in December 2007.
Investors appeared pleased with the report. The Dow Jones industrial average gained 31 points by midday Friday.
The number of Americans who were working part time in November but wanted full-time work declined. And a measure of discouraged workers — those who wanted a job but hadn't searched for one in the past month — rose slightly.
Those two groups, plus the 12 million unemployed, make up a broader measure that the government calls "underemployment." The underemployment rate fell to 14.4 percent in November from 14.6 percent in October. It's the lowest such rate since January 2009.
Since July, the economy has added an average of 158,000 jobs a month. That's a modest pickup from 146,000 average in the first six months of the year.
In November, retailers added 53,000 positions. Temporary help companies added 18,000 and education and health care also gained 18,000.
Auto manufacturers added nearly 10,000 jobs.
Still, overall manufacturing jobs fell 7,000. That was pushed down by a loss of 12,000 jobs in food manufacturing that likely reflects the layoff of workers at Hostess.
Sandy forced restaurants, retailers and other businesses to close in late October and early November in 24 states, particularly in the Northeast.
Ashworth noted that hiring by companies was actually better in October than the government first thought. The overall job figures were revised lower that month because governments cut about 35,000 more jobs than first estimated.
The U.S. grew at a solid 2.7 percent annual rate in the July-September quarter. But many economists say growth is slowing to a 1.5 percent rate in the October-December quarter, largely because of the storm and threat of the fiscal cliff. That's not enough growth to lower the unemployment rate.
The storm held back consumer spending and income, which drive economic growth. Consumer spending declined in October and work interruptions caused by Sandy reduced wages and salaries that month by about $18 billion at an annual rate, the government said.
Still, many say economic growth could accelerate next year if the fiscal cliff is avoided. The economy is also expected to get a boost from efforts to rebuild in the Northeast after the storm.