U.S. President Barack Obama has welcomed news that the national unemployment rate fell last month, but warned of a “significant blow” to the economy if Congress fails to extend payroll tax cuts and renew unemployment benefits.

The Labor Department on Friday said the unemployment rate for November was 8.6 percent, the lowest level in more than two years and a drop of four-tenths of a percent from October.

U.S. stocks rose after the news Friday. The figures also show that the U.S. economy had a net gain of 120,000 jobs.

But Mr. Obama said he was disappointed Senate Republicans on Thursday blocked his plan to extend the payroll tax cut for middle-class Americans. He said without the extension, Congress is effectively raising taxes on nearly 160 million Americans. Republicans oppose higher taxes for the wealthiest Americans to pay for the cut.

Earlier Friday, House Speaker John Boehner said any job creation is welcome news, but that the unemployment rate remains “unacceptably high.”

A closer look at the data shows a mixed picture of the job market — part of the improvement comes from hiring by private companies, while some of it is because several hundred thousand people gave up their search for work. The unemployment rate only considers people who are actively seeking jobs.

The Labor Department notes an increase in jobs in retail, restaurants and bars, professional and business services, and health care. It says government employment continued to shrink, with job losses in state and local governments.

Mr. Obama spoke in Washington at a building being renovated for energy efficiency. He was accompanied by former president Bill Clinton, who is supporting administration efforts on such projects.