Manual Labor (Report) pays off on Wall Street

The strongest job growth in years powered stocks to record highs on Friday and put the Dow on track to break the 18,000 mark for the first time.

The blue-chip index came within 9 points after a November report paired the largest monthly job gain in nearly three years with an hourly wage increase that was double expectations.

The Bureau of Labor Statistics' report showing the economy added 321,000 jobs last month extended the streak in private-sector employment gains to 57 straight months — the longest on record.

And while the monthly increase came in 40 percent greater than the 230,000 new jobs forecast by economists, the BLS also added 44,000 more jobs to the gains initially reported for September and October.

"This means the average monthly increase for each of the past three months is over 275,000 jobs," said Harry Holzer, a former Labor Department chief economist who teaches at Georgetown University.

The revised average is "much stronger than anything we have observed in this recovery," he said.

Holzer took additional confidence from last month's 0.4 percent increase in average hourly earnings — to $24.66 per hour — after two months of weak readings.

"This gain at least raises hope that a tightening labor market will lead to wage increases, which so far have been fairly absent," he said.

Buoyed by the jobs report, stocks soared into record territory early in the day, with the Dow topping out at 17,991.19. It pulled back in afternoon trading, to close at 17,958.79, a gain of 58.69 points.

The market's response indicates investors favor a strengthening economy – even if that moves the Federal Reserve to increase interest rates sooner rather the later.

Such hikes may not be an immediate threat, given the unemployment rate remained unchanged at 5.8 percent and the number of long-term unemployed — those jobless for at least 27 weeks — held steady at 2.8 million.

"We still have a long way to go to undo the damage from the financial crisis," said New York University economics professor Joe Foudy. "The percentage of Americans in the labor force remains far below where it should be."

Still, coupled with the sharp drop in gas prices, the report bodes well for the holiday season — especially since the pickup in employment is now in higher-paying industries.

Professional and business services added 86,000 jobs in November, compared with an average of 57,000 per month over the past year.

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Manual Labor (Report) pays off on Wall Street

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