WASHINGTON — The long-suffering job market is ending the year better off than it began.

The number of people applying for unemployment benefits each week has dropped by 10 percent since January. The unemployment rate, 8.6 percent in November, is at its lowest level in nearly three years.

Factory output is rising, business owners say they’re more optimistic about hiring and consumer confidence has jumped to its highest level since April.

“We are ending the year on an up note,” says Joel Naroff, president of Naroff Economic Advisors.

Still, 25 million Americans remain out of work or unable to find full-time jobs. Most analysts forecast a stronger economy and job growth in 2012 — and rule out a second recession — but they caution that could change if Europe’s debt crisis worsens or consumers pull back on spending.

On Thursday the National Association of Realtors said the number of people who signed contracts to buy homes rose in November to its highest level in a year and a half.