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. September’s payroll gain of 145,000 was revised up from 137,000.
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The U.S. economy had a net gain of 211,000 jobs in November, while the unemployment rate held steady at a 7½-year low of 5 percent.
Revisions showed employers also added 35,000 more jobs in September and October than previously estimated.
Friday’s jobs report is getting extra attention, as it is the last major United States data point the Federal Reserve will review before it meets later this month to consider raising interest rates.
The economy “is doing well and that is the reason that it is a live option for us in our December meeting to discuss, as we indicated, whether or not it’s appropriate to raise rates”, Ms. Yellen told a joint congressional panel.
In addition, restaurants added 31,500 positions, retailers almost 31,000.
Unemployment rates remain at a 7 1/2 year low, holding steady at 5%.
“Job gains occurred in nearly every sector, and all secondary measures of labor market distress were down”, says Hicks, director of Ball State’s Center for Business and Economic Research. Fed funds futures price in about 79% odds of a rate hike in December.
United States equity markets took the jobs report as a confirmation that the economy continues to grow at a good pace, with the S&P 500 surging 2.1 per cent.
Since the Great Recession ended 6½ years ago, average hourly pay has grown at only about two-thirds of the pace typical of a healthy economy. Jobs were added in construction, health care, and “professional and technical services”-the Labor Department’s term for an assortment of white-collar jobs”. The jobs gains exceeded expectations.
That should support better spending, particularly among Americans more dependent on wages than other forms of income.
The report said non-farm payroll employment jumped by 211,000 jobs in November compared to economist estimates for an increase of about 190,000 jobs. Jobless rate is now at 0.5 percent.
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The dollar could rise further next year should the Fed raise interest rates even as its counterparts overseas, such as the European Central Bank, cut them further. For the year, wages are up a steady but unspectacular 2.3 percent.
