“To simply provide jobs for those who are newly entering the labour force probably requires under 100,000 jobs per month”, with anything above that helping “absorb” those who are unemployed, discouraged or had dropped out of the labour market, Ms. Yellen, who was speaking before Congress’ Joint Economic Committee, said in a question and answer session. And she has cited the labor market’s cumulative progress in recent years, with the unemployment rate down to 5% from 10% in 2009, and employers adding an average of more than 200,000 jobs a month in 2015.
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Last month, United States employers smashed expectations and added 271,000 jobs, the largest number of any month so far this year. The September job growth figure was also revised upward by 7,000 to 145,000. This should put to bed any doubts about whether the Fed will announce a rate increase later this month.
In all, the data from the Labor Department shows an economy growing at a steady pace even if the increase in gains remained subdued due to many Americans still not working or are in part time work because there are not full time positions for them.
To prevent spooking the financial markets, Fed officials have been hinting strongly at the possibility of a December hike for several weeks. Manufacturing contracted in November for the first time in three years.
Average hourly pay for all employees on private nonfarm payrolls “rose by 4 cents to $25.25, following a 9-cent gain in October”, the agency says, adding that average hourly earnings have risen by 2.3 percent over 2015. It may have been her strongest comment yet pointing toward a rate increase at the Fed’s December 15 and 16 meeting. “If it were simply stable over time rather than on that declining trend, I think we would be absorbing people who were perhaps discouraged”, Yellen also said.
Policy makers have penciled in four rate hikes next year, according to the median estimate of their projections released in September. For the year, the sector has lost 123,000 jobs.
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.
The unemployment rate was unchanged at 5.0%.
Because the economy showed strong hiring in November, Hicks believes it is strongly possible likely the Federal Reserve will raise interest rates from record lows later this month.
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Fed Chair Janet Yellen twice this week expressed confidence that the USA economy is growing strongly enough to justify raising the federal funds rate, which has been stuck at 0-0.25 per cent since December 2008 to support a rebound from the Great Recession. Retail jobs rose 30,700 and transportation and warehousing employment rebounded after two straight months of declines.
