WASHINGTON (MarketWatch) — The U.S. generated 203,000 jobs in November on strong hiring across the board and the unemployment rate fell to its lowest rate in five years, suggesting the economy might be accelerating toward the end of 2013.

The drop in unemployment to 7.0% from 7.3%, largely reflects the return of federal workers after the end of the government shutdown in October, but the number of people looking for a job also increased. The jobless rate is now at the lowest level since November 2008, according to Labor Department data.

The fresh employment numbers suggest the U.S. economy — after a midsummer pause — is expanding at a moderate clip, with room for faster growth in the months ahead. Other key areas of the economy such as manufacturing and housing have also seen renewed strength.

“Recent data, including today’s jobs report, suggest some strengthening of the economy heading into the end of the year,” noted Jim Baird, chief investment officer at Plante Moran Financial Advisors.

Yet that’s probably not enough to cajole the Federal Reserve to scale back its massive economic stimulus program before the end of 2013, most analysts say. The central bank has said it would not withdraw its stimulus until the labor market showed clear and sustained improvement.

The largely positive November employment did offer some caveats. As many as one-fourth of the jobs created last month could reflect seasonal hiring that will dissipate after the holidays. And the number of long-term unemployed — people out of work for at least six months — was basically unchanged in November at 4.1 million.

What’s more, a steady decline in the unemployment rate in 2013 is almost entirely the result of fewer people looking for work, according to an analysis by BNP Paribas. That’s clear evidence the economy is not producing jobs fast enough to create a truly healthy labor market.

“That’s a very worrisome sign,” said economist Yelena Shulyatyeva at BNP. “This is something the Fed needs to think about very carefully and I am sure it is.”

In Friday trading, U.S. stocks rose sharply after the better-than-expected increase in jobs. Economists polled by MarketWatch had forecast a gain of 180,000. See market reaction to jobs report.

Inside jobs report

Hiring in November was strong in most industries, including transportation and warehousing, professional occupations, manufacturing, health care, construction and retail. And there was a shift toward more well-paying jobs compared with October.

The number of businesspeople and professionals who found work rose by 35,000 to lead the way. It has been the fastest-growing category over the past year.

Companies that warehouse and deliver goods, meanwhile, hired 31,000 new workers in the run-up to the holiday season. Lots of those jobs are eliminated after the holidays, however.

Manufacturing and construction also showed improvement. Manufacturers added 27,000 jobs — the biggest increase since March 2012 — in yet another sign that the industry is rebounding from a slow start to 2013.

Construction companies also added 17,000 jobs, slightly above the industry’s 12-month average. The steady rate of hiring indicates that builders are sticking to plans boost home construction in 2014, another good sign for the U.S. economy. From logging to leasing, more on housing rally.

The only job cuts came in the federal government, which has eliminated positions in every month of 2013. Washington has been trimming jobs mainly because of budget reductions related to a law that took effect earlier in the year known as the sequester.

The higher concentration of good-paying jobs created last month helped to push up average hourly wages by 4 cents to $24.15. Over the past year hour earnings have climbed a mild 2%.

The average workweek edged up 0.1 hour to 34.5 hours, which remains near a post-recession high. Hours usually increase when the economy strengthens.

The return of government workers boosted the civilian participation rate rose to 63.0% from 62.8%, but it’s doubtful that an upward trend can be sustained absent a major surge in hiring and economic growth. The participation rate — a gauge of Americans 16 and older looking for work — has fallen steadily since the end of the recession and is hovering near a 35-year low.

A broader measure of unemployment, the so-called U6 rate, also fell sharply in part because of the end of the government shutdown. It declined to 13.2% from 13.8%. The U6 rate includes people who recently gave up looking for work as well as those who can only find part-time positions.

Economists say the decline in the unemployment rate should be viewed with caution. The December employment report is likely to yield a clear idea of trends in the labor market since the effects of the government shutdown would have passed, they say.

Employment gains for October and September were little changed overall. The number of new jobs created in October was trimmed to 200,000 from 204,000, while September’s figure was raised to 175,000 from 163,000.

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