WASHINGTON—The U.S. job market strengthened in November, as hiring jumped and unemployment returned to a half-century low, adding fuel to the economic expansion.

Employers added 266,000 jobs last month—the fastest pace since 312,000 in January—and the jobless rate dipped to 3.5%, matching September as the lowest level since 1969, the Labor Department said Friday. Wages also advanced, up 3.1% from a year earlier.

“This is a ‘who would have thought moment?’” said Becky Frankiewicz, president of staffing company ManpowerGroup’s North America division. “No one would have ever guessed we could be sitting at 3.5% unemployment with 110 months of job gains.”

U.S. stocks and government-bond yields rose after the upbeat jobs report, offsetting some of the jitters about trade from earlier this week.

Jobs grew by an average of 205,000 a month in the three months through November, a pickup from the pace earlier in the year but less than the average growth of 223,000 a month of 2018. The stronger pace of hiring this fall could help juice the broader U.S. economy, which is still expanding but at a slower pace than last year.