The US economy added 211,000 jobs in November, slightly better than expectations, with the unemployment rate remaining steady at 5%, the US Department of Labor announced on Friday. October’s payroll gain was 298,000, revised up from an initially reported 271,000. Over the past 3 months, job gains have averaged 218,000 per month. Construction companies added a two-year high of 46,000 jobs, bolstered by more homebuilding and new infrastructure projects, while retailers hired 31,000 workers, and the government added 14,000 positions.
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So while Fed policy makers are set to raise rates at their meeting later this month, there was nothing in the jobs report to dissuade investors from their belief that further rate increases will be slow coming.
“It is natural for the FED to lift the interest rate because the US economy is gradually recovering and low interest rates have resulted in higher risks in the financial market such as the pursuit for high risks and profits and tight liquidity”.
Gold rallied strongly despite November’s better than expected USA non-farms payroll report. “With today’s positive job gains, it’s very likely the [Federal Reserve will] begin raising interest rates at its December meeting”.
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.
“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 drawn within the Fed over readiness to tighten policy.
The civilian labor force participation rate was at 62.5 percent and changed little in November, the Labor Department said.
Employers have now added an average 213,000 jobs a month over the past six months.
Since the Great Recession ended 6½ years ago, average hourly pay has grown at only about two-thirds of the pace typical of a healthy economy. That would lower the year-on-year reading to 2.3 percent from 2.5 percent.
Mining employment has already declined by 109,000 since reaching a peak in December 2014.
Job gains occurred in construction, professional and technical services, and health care.
According to Jim O’Sullivan, chief United States economist at High Frequency Economics, recent jobless claims data shows no signs of labor market weakening.
Fed chairwoman Janet Yellen, who appeared before a joint congressional panel Thursday, warned against putting too much focus on Friday’s report, and reiterated that officials are focused on underlying trends showing the domestic economy is improving, including stronger household spending, business investment and home building. “It will have to be a disaster for the Fed to delay until 2016”, said Ryan Sweet, senior economist at Moody’s Analytics in Westchester, Pennsylvania.
Almost 8 million Americans are still out of work, according to the Bureau of Labor Statistics, and another 6.1 million can only get part-time work, though they want full-time employment.
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The central bank’s policy-setting committee will meet on December 15-16.
