“November’s gain of 211,000 jobs, coupled with upward revisions to October and September, confirms the Fed’s view that the labor market remains robust and that wage growth could accelerate in 2016”, Levanon said.
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Besides the strong job gains, the average hourly pay also edged up compared with its level a year ago, with average hourly earnings rising 4 cents to 25.25 USA dollars in November.
The economy produced another sturdy gain in new jobs in November, all but guaranteeing the Federal Reserve will raise US interest rates later this month in response to a tightening labor market.
Indeed, analysts expected that only an bad employment report would have rocked the Federal Reserve’s boat ahead of a meeting later this month that will ultimately determine whether 2015 is the year for an interest rate liftoff. The Nasdaq composite rose 104.74, or 2.1 percent, to 5,142.27.
The report comes in the same week as the Fed’s chair struck an upbeat note about the United States economy – and hinted at that long-awaited rate rise.
Job gains were led by construction, where 46,000 positions were added, as well as professional and technical services, healthcare and restaurants and bars. But that likely would not have happened if investors knew the Fed was moving in spite of a weak jobs report. The department upwardly revised its job figures for the previous two months. CEO Tiger Tyagarajan says Genpact has added about 400 people to its 4,000 person USA workforce this year, many of them in highly skilled areas such as software programming and management consulting. With the new data, “a rate hike at the December 15-16 Fed meeting is (almost) a sure thing”.
Although unemployment at 5 per cent was at or near the level many policymakers consider to be full employment, Ms Yellen said high levels of discouraged workers, part-time employment and other job market measures showed there was still room for progress.
“Wage growth moderated somewhat, but the labor force participation rate ticked up for the first time since May”.
Manufacturing employment, meanwhile, slipped by 1,000 and jobs in mining and logging, which has been hit by the slump in oil investment, fell by 11,000.
Any increase would be the first movement since the Fed’s benchmark rate was slashed to near zero in 2008 at the height of the recession.
“The Fed will raise rates in December and data are now being watched primarily to determine how quickly rates rise next year and beyond”, echoed Chris Low, economist at FTN Financial.
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Not including the farm sector, the number of new jobs created rose by 211,000 in November.
