The report “would appear to seal an interest rate hike at the Fed’s upcoming…meeting”, economist Paul Ashworth of Capital Economics wrote in a note to clients. In trading early this morning, stocks were strongly up on the news while bond yields fell slightly.
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The jobs report from the Bureau of Labor Statistics reconfirms the positive momentum started by the last month’s reading.
On Thursday, Fed Chair Janet Yellen’s signaled to a joint Congressional committee that the Federal Reserve was on track for a December rates rise. It is also near the average monthly increase of 199,000 in 2013 and 260,000 in 2014.
“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 jobs report was music to the ears of the Federal Reserve”, Joseph Lake, global economist at the Economic Intelligence Unit, told the publication.
At 62.5 percent, the proportion of Americans in the labor force remains near multidecade lows. It could be that they’re seen as more reliable, harder workers, less entitled than, say, a millennial applying for the same job.
America has added 12 million jobs since the recession ended in June 2009.
“(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.
There were still weaknesses in the report: average wage gains remain slow – up just 0.16 percent from October; the ratio of working age people participating in the labor force is historically very low; and the number of people forced to take part-time jobs increased by 319,000 to a still-large 6.1 million. Year-over-year hourly pay rose 2.3 percent after a 2.5 percent gain a month earlier. “It was 2.3% year-over-year in November; that’s a little bit down from October”, said Faucher. But Fed officials, including Yellen, are expecting the inflation will gradually go up in the medium run.
“It is a day that I expect we all are looking forward to”, she said.
Friday’s government report says job gains were seen in construction, professional services, and health care.
Job gains occurred in accounting and bookkeeping services (+11,000), and employment in computer systems design and related services continued to trend up (+5,000). Construction firms hired 46,000 people, restaurants added 32,000 employees and retailers beefed up staff by 31,000.
The job figure for October was also revised upwards to 298,000 from 271,000.
UniCredit’s chief economist Harm Bandholz believes that the latest unemployment data should dispel any doubts about the incoming rate hike later this month.
With a nationwide workforce of about 425, Berger said he anticipated hiring another 100 workers in the next year.
But for economists, the most anticipated data set yesterday was United States jobs numbers.
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One of the most bearish forecasts far has come from ABN Amro, which suggests gold will break below US$1,000 before the end of the first quarter next year and drop to a low of US$900 or below later in 2016.
