The unemployment rate held at a more than seven-year low of 5 percent, just above the 4.9 percent that US central bankers reckon is equivalent to full employment, according to their median estimate from September.
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A freshman Federal Reserve policymaker added his voice to the majority expecting an interest rate hike this month, saying on Friday he would prefer to start tightening sooner than later to keep the economy on track and to protect the central bank’s credibility.
Exceeding expectations, employers added 211,000 jobs to their rolls in November – the second consecutive month of strong gains after a two-month slump. The jobless rate for those with a bachelor’s degree or higher was 2.5% in November, also unchanged from the previous month.
But a broad measure of joblessness that includes people who want to work but have given up searching and those working part-time because they can not find full-time employment rose one-tenth of a percentage point to 9.9 percent. The September number moved up by 8,000, to 145,000, and the October figure improved by 27,000, to 298,000, for a total additional gain of 35,000 jobs.
Construction payrolls increased 46,000 last month. A rate hike by the Fed could lead to further rises in the dollar’s value, which in turn could exacerbate the headwinds faced by America’s exporters and compound issues for steel and aluminum plants reeling from cheap Chinese imports. “A December rate hike now looks to be in the bag”. Average hourly pay has grown at only about two-thirds of the pace typical of a healthy economy. This amount is almost identical to the 199,000 monthly jobs averaged during 2013 and less than 2014’s monthly average of 260,000.
The overall job growth in November is promising, but the lack of significant manufacturing growth reflects economic uncertainty.
Friday’s job report would have had to have been a “disaster” for the Fed to delay raising interest rates, said economists. On Dec. 3, Ms. Yellen said at a Congress’s Joint Economic Committee meeting that the USA economy would need a 100,000 advance in payroll every month to integrate all new comers into the labor market. It has increased by 284,000 over the year.
Manufacturing has been crippled by a strong dollar, efforts by businesses to reduce bloated inventory and spending cuts by energy companies scaling back well drilling and exploration in response to sharply lower oil prices. While other categories of Americans experienced improvements in their participation levels, the number of American men not in the workforce increased by 178,000 from October’s level of 37,973,000. This should put to bed any doubts about whether the Fed will announce a rate increase later this month.
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“As the labor markets gets tighter, the downward trend in the unemployment rate is naturally becoming more moderate, yet we still expect the rate to reach 4.5% a year from now”, Levanon said. Within the industry, employment in motion pictures and sound recording decreased by 13,000 in November but has shown little net change over the year.
