The gain of 211,000 in November shows the consistency of this year in jobs gains as the average for all of 2015 is 210,000. Construction companies added 46,000 jobs, the most in two years.
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According to the U.S. Labor Department, U.S. payrolls rose in November beyond the Fed’s expectations and hourly earnings should hit 2.6 percent this month.
FED Chair Janet Yellen said in the past week that the USA economy appeared to be strong enough to justify a possible interest rate hike in December.
Gus Faucher, senior economist at PNC Financial Services Group, said the solid labor market growth in recent months would mean that November jobs growth would have had to have been below 100,000 to prevent Fed policymakers from hiking the interest rate when they meet December 15-16. Friday’s report included upward revisions to that number: according to the Department of Labor, an additional 27,000 jobs were created in October and about 8,000 more jobs were created in September than originally believed. Even some of the hawks, who would typically worry more about inflation risks than weak economic growth, are weighing a possibility that they may face a long spell of sub-par growth and low inflation. As a result, the labor force participation rate – the share of working-age people who are employed or at least looking for a job – rose to 62.5 percent from a near 38-year low of 62.4 percent.
Analysts said it was near certain that the Fed, after keeping policy on hold for months awaiting more evidence of economic strength, would undertake its first rate increase in more than nine years at its upcoming meeting. “It was 2.3% year-over-year in November; that’s a little bit down from October”, said Faucher.
Though wage growth slowed last month, economists say that was mostly payback for October’s outsized gains, which were driven by a calendar quirk.
Employment gains in November were broad-based, though manufacturing shed 1,000 positions and mining lost 11,000 jobs. The iconic US auto industry, which was flat on its back just seven years ago, continues its remarkable comeback.
“You have an open debate between doves and hawks as to what the pace of increases should look like”, said Art Hogan, chief market strategist at Wunderlich Securities in NY, referring to the divisions drawn within the Fed over readiness to tighten policy.
Yet solid consumer spending and the housing recovery have underpinned payroll gains, more than offsetting industrial output that’s been curtailed by a strong dollar that has hobbled exports and bolstered imports.
Sarah Raminhos landed a new accounting job last month at a firm in Chevy Chase, Maryland, with a salary about 5 percent higher than her old one.
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As the unemployment rate has gone down, employers have had to offer better pay to attract better job applicants.
