The U.S. Department of Labor also reported Friday that November’s jobless rate remained unchanged at 5 percent – its lowest level in more than seven years – while also revising upward estimated job growth for September and October by a combined 35,000 jobs.
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Gus Faucher, senior economist at PNC Financial Services Group, said the solid labor market growth in recent months would mean that November jobs growth would have had to have been below 100,000 to prevent Fed policymakers from hiking the interest rate when they meet December 15-16. Construction firms added 46,000 jobs, the biggest increase in two years. New jobs were concentrated in construction, professional and technical services, and health care.
“While hourly earnings slowed relative to a month ago, they still show at least a little net acceleration”, said Jim O’Sullivan, chief US economist for High Frequency Economics.
Government added 14,000 positions in November, and retailers almost 31,000. If that persists it “may be leading us to an outcome with low nominal interest rates and low inflation that can last for a very long time”, he said, adding the Fed needs to be willing to pause and also to speed up its pace of tightening.
Fed chair Janet Yellen struck an upbeat tone about the prospect of a rise in remarks on Wednesday, which she said would show how far the economy had come since the downturn and that it was a day “we all are looking forward to”.
She acknowledged the persistent slack in the market, which had posed a barrier to a rate increase since past year. Spending in that sector has reached its highest level in eight years, boosted by more home-building and development of more roads and infrastructure, the Associated Press reported.
A strong USA dollar and spending cuts by energy companies have been headwinds to the economy.
USA employment increased at a healthy pace in November, in another sign of the economy’s resilience, and will most likely be followed by the first Federal Reserve interest rate rise in a decade later this month.
You know the job market’s continued strength makes a Federal Reserve rate increase a go.
“We have seen an acceleration in wage growth”.
Investors cheered the jobs report, with the Dow Jones industrial average rising 200 points a half hour after trading began.
October non-farm payrolls were increased to 298,00, up from 271,000, a number that far exceeded expectations last month and sparked a bond market sell-off in early November.
“It was encouraging that job growth has become more broad-based”, said Ryan Sweet, director of real time economics at Moody’s Analytics.
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Employers have added a robust average of 237,000 jobs a month over the past 12 months. By some estimates, the “neutral” rate – that is, the threshold above which the Fed would be hitting the brakes – could be as low as 1 percent. “There were fewer workers laboring part-time for economic reasons and small declines in discouraged and long-term unemployed workers”.
