WASHINGTON (AP) — Small businesses and startups that were skittish about the US economy this summer started hiring in bigger numbers this fall, helping drive the unemployment rate down to 8.6 per cent in November, the lowest in two and a half years.

America added 120,000 jobs in November, the Labor Department said Friday. The economy has generated 100,000 or more jobs five months in a row — the first time that has happened since April 2006, well before the Great Recession.

“Something good is stirring in the US economy,” Ian Shepherdson, an economist at High Frequency Economics, said in a note to clients.

The stock market opened higher after the unemployment report came out. The Dow Jones industrial average climbed 32 points, good for a weekly gain of 820 points. The only bigger point gain in one week was in October 2008.

The report, one of the most closely watched economic indicators, showed that September and October were stronger months than first estimated. For four months in a row, the government has revised job growth figures higher for previous months.

Unemployment was 9 per cent in October and has been stuck near or above that level for two and a half years. The last time unemployment was this low was March 2009, two months after President Barack Obama took office.

“Now is not the time to slam the brakes on the recovery, right now it’s time to step on the gas,” Obama said. He encouraged Congress to extend a tax cut that applies to 160 million Americans but is set to expire at year’s end.

But even with the recent gains, the US economy isn’t anywhere close to replacing the jobs lost in the recession. Employers began shedding workers in February 2008 and cut nearly 8.7 million jobs for the next 25 months. Since then, the economy has regained nearly 2.5 million of those jobs.

The presidential election is less than a year away, which means Obama will almost certainly face voters with the highest unemployment rate of any president since World War II. Still, if the rate continues to decline, Obama stands to benefit. Rival Republicans have made the nation’s joblessness a key campaign issue.

About 13.3 million Americans are counted as unemployed. Private employers added 140,000 jobs in November, while governments shed 20,000. Governments at all level have cut almost a half-million jobs this year.

More than half the jobs added last month were by retailers, restaurants and bars. Professional and business services also rose. Those tend to be higher-paying jobs — engineers, accountants and high-tech workers.

Still, more than 300,000 people stopped their job searches last month, so they were no longer officially counted as unemployed. That accounts for some of the drop in the unemployment rate.

The so-called underemployment rate, which counts people who have given up looking and people who are working part-time but want full-time jobs, did fall — to 15.6 per cent from 16.2 per cent.