In some positive news for the U.S. economy, it was reported today that the economy generated another month of solid hiring in November making it very likely that the Federal Reserve would hike interest rates for the first time in over a decade at its December meeting.
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Jobs added in September and October were also revised by the Labor Department, increasing by a total of 35,000.
The Labor Department on Friday reported the USA gained 211,000 jobs last month, with jobs figures for October and September nudged higher as well. Construction companies added 46,000 jobs, the most in two years.
In fact, over the past 12 months, job gains have averaged 237,000 per month – lower than 2014’s average of 246,000 per month, but high enough, perhaps, to tempt the Federal Reserve to raise interest rates when they meet later in December. In this regard, the job market has met the Fed’s standard to begin monetary policy tightening, analysts say. The unemployment rate remained at 5%, but for the good reason that more people entered the labor force.
Wage growth slowed for the month of October, but average hourly earnings increased by four cents. That would lower the year-on-year reading to 2.3 percent from 2.5 percent.
“Still, economists expect the creation of millions of new jobs and a falling unemployment rate to put more upward pressure on wages in the near future”, MarketWatch said.
In her testimony before Congress Thursday, Yellen said the economy needs to add roughly 200,000 jobs a month to keep the labor participation rate steady and draw back workers who have dropped out of the workforce.
Friday’s upbeat report on the job market may help overcome investor worries about recent reports of tepid consumer spending and a slowdown in the services sector of the economy.
Even with strong hiring over the past year, wage growth has remained perhaps the job market’s biggest weakness since the recession ended.
“I would like to see rates raised sooner rather than later”, he told a conference of economists and journalists at the Philadelphia Fed. Average hourly pay has grown at only about two-thirds of the pace typical of a healthy economy. Additionally, “over the month, support activities for mining and coal mining lost 7,000 and 1,000 jobs, respectively”.
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But the dollar was virtually unchanged at $1.0935 per euro and Treasury bond yields, which had already climbed this week on Yellen’s remarks, were also little-affected.
