Surprise! 321K jobs added in November is the best report in years.

The job market has become accustomed to slow, steady gains over the past two years or so: good news, sure, but not necessarily great news. This month’s jobs report jumped decisively into “great news” territory. 

The economy added 321,000 jobs in November, according to data released Friday by the Labor Department. The growth shattered economists’ expectations of about 230,000 added jobs and was the biggest monthly gain since January 2012. Job gains for September and October were also revised upward, to the tune of 44,0000 apiece, and the economy has now added at least 200,000 jobs every month since January 2014. The unemployment rate held steady at 5.8 percent. Joshua Shapiro, an economist with MFR, Inc., called it an “upside blowout for payroll employment,” in an e-mailed report.

All told, it’s the strongest stretch of sustained job growth in nearly two decades. Underemployment (a measure of workers working fewer hours than they would like) and long-term unemployment  (those out of work 27 weeks or more) both fell slightly.

In addition, wages, which have been largely stagnant, are finally showing signs of life. “The flow of good news on hiring was accompanied by signs that private sector wage growth is showing tentative signs of picking up, albeit only from 2.0 percent to 2.1 percent,” MarkIt economist Chris Williamson wrote via e-mailed analysis. “That’s still well below levels that will worry policymakers, but it is nevertheless reassuring that wage growth is at least moving in the right direction.”

With the job market speeding along, the next question is when the Federal Reserve will finally pull back on interest rates, which have been kept at historic lows in order to give the economy a boost. The general consensus is that the Fed will start to raise rates sometime next summer, but today’s surprisingly strong report raised the prospect of a rate hike coming even sooner. 

The more hawkish members of the Fed – those in favor of scaling back policy – are “likely to begin pounding the table a bit harder,” at the Fed’s December meeting, Mr. Shapiro writes. “With more Fed officials beginning to stress the data-dependency rather than time-dependency of policy, the robust trend of labor market gains will be front and center in the debate,”

This could mean a pullback on Wall Street, where stock market gains have made a habit of new record highs and big returns in the face of the favorable Fed policies. Stocks were mixed in early morning trading after the employment data’s release.

Still, many analysts anticipate headwinds that could delay a rate hike coming any sooner than anticipated. For one, “we anticipate some modest cooling of the labour market is possible in coming months,” Mr. Williamson writes, as the pace of economic growth has slowed somewhat. 

“However,” he continues, “as far as policy is concerned, the signs from the labor market are all positive. Policymakers will no doubt be minded that, with job creation as strong as this and wages picking up, the economy looks increasingly able to withstand a modest tightening of policy. On the other hand, the lack of any significant wage growth points to a benign inflation outlook, which in turn suggests there remains no immediate rush to hike rates. We should therefore continue to expect policymakers to start edging interest rates higher in mid-2015, barring any further downshifting in the pace of economic growth.”