The U.S. labor market generated a better-than-expected 211,000 jobs last month, and revisions to prior months’ data added on a previously unreported 35,000 positions to the economy, according to a Friday report from the Labor Department.
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Friday’s employment report offered further evidence that the US economy is strong enough for the Fed to raise rates at its next policy-making meeting in mid-December.
This morning’s jobs report from the Bureau of Labor Statistics showed that the economy added 211,000 jobs in November-a decent amount, but lower than October’s more solid report, which was revised substantially upward.
A positive jobs report for November “all but guarantees” the Federal Reserve will raise USA interest rates later this month, experts say.
Employers added 509,000 workers to their payrolls over the last two months, the biggest back-to-back increase this year.
Investors cheered the jobs report, with the Dow Jones industrial average jumping almost 250 points in midday trading.
Over the past 12 months, the unemployment rate and the number of unemployed persons are down by 0.8 percentage point and 1.1 million, respectively.
“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 within the Fed over readiness to tighten monetary policy. The unemployment rate for men was 5.2 percent.
Wage growth eased a bit last month, with average hourly earnings for all employees on private non-farm payrolls rising by 4 cents to $25.25, following a 9-cent gain in October.
Economists expect the Fed to announce an increase in interest rates in the coming weeks. A jump in pay would indicate workers were seeing gains in an economy slowly improving for six years.
Friday’s job report would have had to be a “disaster” for the Fed to delay raising interest rates, said economists.
Other labour market measures that Fed officials are eyeing as they consider lifting the benchmark overnight interest rate from near zero were mixed. Such a divergence could pose a drag on US growth by pressing up the value of the dollar beyond its already high level. Unemployment is low, growth continues at a modest pace, and Ms Yellen said she was confident inflation would return to the Fed’s target over time.
In other data, the United States trade deficit widened unexpectedly in October as exports fell to a three-year low, suggesting that trade could again weigh on economic growth in the fourth quarter.
“(150,000) should be a number that adds to the general perception that the Fed will finally make its first rate hike” since 2006, Blitz predicts.
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Manufacturer shed 1,000 jobs in November, the third decline in four months, as the strong dollar, soft global economy and energy-sector woes take a toll.
