Federal Reserve Chair Janet Yellen, speaking the day before a key employment report, said the USA economy needs to add fewer than 100,000 jobs a month to cover new entrants to the workforce, setting an implicit floor for the jobs growth policymakers want to see.
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Economists had forecast that Friday’s report would show that 200,000 more jobs were added last month and that the unemployment rate remained at 5 percent, according to data firm FactSet.
The unemployment rate remained a low 5 percent for a second straight month. Average monthly job creation for this year so far is now 210,000, substantially less than the average for 2014 of 260,000.
The average work week fell slightly to 34.5 hours in November, from 34.6 hours in October.
The robust figures could now pave the way for the first USA interest rate rise in close to 10 years later this month.
“We cleared the last hurdle for a rate increase”. The jobs report “is a bright green signal for the Fed to go ahead and move in December”, and indicates future rate increases should proceed at a “moderate pace”. Spending in that sector has reached its highest level in eight years, boosted by more homebuilding and development of more roads and infrastructure.
Helal Miah, investment research analyst at The Share Centre, said: “The implication is that it makes the Federal Reserve’s decision to raise interest rates at the next meeting easier”.
Retailers added 31,000 jobs last month amid the holiday shopping season, and they added 44,000 jobs in October.
A healthy rate of hiring has raised the odds that Fed officials will raise interest rates this month for the first time since 2006.
In November, 1.7 million people were marginally attached to the labor force, down by 392,000 from a year earlier. But the Fed feels that rock-bottom interest rates – if allowed to linger for too long – could lead to risky behavior from investors and cause price bubbles.
The good news on employment gains in November was also sweetened by revised estimates of job gains in the previous two months, Gary Burtless, a senior fellow at the Brookings Institute, wrote in an article Friday.
Average hourly employee earnings rose by $0.04 or 0.2 percent to $25.25 in November after climbing by $0.09 in September.
It increased to 9.4 percent in August 2009, a 30-year high.
Dolega said wage gains are being held back by steep job cuts in mining, a category that consists mostly of oil and gas drilling and has shed 14 percent of its jobs in the past year.
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“I think the numbers still have been strong enough recently they’re not particularly concerned about one number”, Faucher said.
