Reuters said the solid job growth makes it likely that the Federal Reserve will raise interest rates when its Federal Open Market Committee meets December 15-16. It would be the first interest rate hike in almost a decade.
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Another month of strong job gains would allay fears the economy had hit a soft patch, after reports showing tepid consumer spending in October and a slowdown in services industry growth in November.
Blowing away expectations by 5.5%, employers added 211,000 jobs to their rolls in November – for what’s been the second consecutive month for strong gains.
The sizable gain in construction jobs last month, even as the Fed is preparing to raise rates, suggests that few expect higher borrowing costs to derail home building or sales.
TIMOTHY A. CLARY/AFP/Getty Images Retailers have reported weak revenue in recent months, but online purchases were robust on Black Friday. Average hourly earnings rose 2.3% in November compared to a year ago.
But at Knox Machinery in Franklin, business has been booming, and the company has been on a steady growth track for months, adding about 30 percent to its workforce in each of the past two years, according to President Greg Knox.
Juan Perez, of Tempus Consulting in Washington DC, said: “The most important thing from the reading is it’s in line with expectations”. The increase in hourly pay over the past 12 months totaled 2.3%, down from 2.5% in the prior month.
Yellen also said the economy needs a net gain of about 100,000 jobs to accommodate new entrants to the economy, and the new jobs have been created at a faster rate than that for some time.
A Fed rate hike typically lifts interest rates for mortgages, auto loans and other borrowing, though those increases might not occur immediately. Manufacturing contracted in November for the first time in three years.
Job creation has been averaging around 200,000 a month this year, a figure Ms Yellen said was “quite a bit” above the number needed to continue absorbing slack in the labour market.
Wages are continuing to rise, but not so much as to cause concern about future high inflation.
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Besides the unemployment, rate and tempo of new hiring, policy makers at the Fed have paid close attention to the wage increase pace or until just recently the lack of one. Of those marginally attached workers, 594,000 were counted as discouraged workers, those not looking for work because they didn’t think that there were jobs available – the same as a year earlier. Mining did worse, axing 11,000 jobs.
