Unemployment at 9.8%

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Job-seekers listen to a recruiter while attending a job fair in Livonia, Mich., in November. The nation's jobless rate rose for the first time in three months.

The bumpy recovery ride continued last month as the nation's unemployment rate hit a seven-month high and the economy created far fewer jobs than expected, but the stock market shrugged off the news.

The jobless rate rose to 9.8 percent in November from 9.6 percent the previous three months, the Labor Department report showed. Meanwhile, the economy added 39,000 jobs, well below the 172,000 added in October and the 150,000 economists had forecast.

Some 15.1 million people were unemployed.

The economy needs to add at least 120,000 jobs to prevent the unemployment rate from rising. To reduce the unemployment rate significantly, monthly job creation has to be a lot stronger -- up to 300,000 new jobs a month, according to economists.

"Disappointing" was the label Chicago-based Mesirow Financial Chief Economist Diane Swonk applied to the November report.

"We know we're in a really uneven recovery," she said. "We expect it to have jagged edges. We're traversing a very uneven train."

Morningstar Inc. economist Robert Johnson expected a better report and believes seasonal factors were at play in the latest numbers. The government's seasonal adjustments took account of the previous two Novembers in calculating the latest employment numbers. But hiring during the last two Novembers was highly volatile, which made the task harder than usual.

"The numbers seem a bit convoluted this time," Johnson said as he pointed to other evidence of an improving job market, including news that the service sector has expanded for 11 straight months, the fact that some major retailers boosted holiday hiring, and recent reports on improvements in manufacturing.

"There are a lot of data points that would seem to indicate that maybe there's something odd" with this job's report, he said. "I would expect that December will look better."

Joel Naroff, president of Naroff Economic Advisors, shares that view.

"We shouldn't panic," Naroff said.

The report showed private-sector employers added 50,000 jobs. Temporary-help firms added 40,000 jobs, and health care added 19,000.

But retailers slashed 28,100 jobs, manufacturers cut 13,000, and construction cut 5,000.

The report showed little change in both the number of people employed part-time because they couldn't find full-time work, which stood at 9 million; and in the number of long-term unemployed, which was 6.3 million.

But the number of discouraged workers rose by 421,000 to 1.3 million.

The Dow rose 19.68 on the report, closing at 11,382.09, while the S&P 500 rose 3.18 to close at 1224.71.

Vice President Joe Biden said the jobs report is a sign the economic recovery is fragile and added it's critical that Congress extend unemployment benefits before the end of the year. Without action by Congress, unemployment benefits will run out this month for 2 million people, and several million more will lose them later in the winter.

Biden also urged the Senate to follow the House in voting to continue Bush-era tax cuts for the middle class. Because of deficit concerns, President Obama and Democratic leaders in Congress want to extend the tax cuts only for individuals making less than $200,000 and married couples making less than $250,000. Republicans and some rank-and-file Democrats want to extend the tax cuts for everyone.

"The lame-duck Congress should do the right thing and vote immediately to cut spending and stop all the tax hikes," House Speaker John Boehner (R-Ohio) said in a written statement.

Contributing: AP