Jobs Report Almost Guarantees Rate Hike by Federal Reserve

The 211,000 increase in payrolls followed a 298,000 gain in October that was bigger than previously estimated, a Labor Department report showed Friday.

The U.S. unemployment rate remains unchanged at 5 percent, the BLS said in its December 4 report. Yet after employment gains bounced back smartly from a two-month slump in October, economists said it was unlikely a weak November showing would dissuade Fed policymakers from boosting the rate, especially since the figures are often revised.

With the November report, the USA has added and average 237,000 new jobs each month in the past year, and the number of officially unemployed people has fallen by 1.1 million.

Businesses added 197,000 jobs., driven by construction, professional technical and services, and health care.

“Some who are counted as out of the labor force might be induced to seek work if the likelihood of finding a job rose or if the expected pay was higher”.

Ms Yellen in her testimony was generally upbeat, spelling out how the economy had largely met the criteria the Fed had set for its first rate increase.

“If lots of firms were expecting to do lots of hiring soon, they would have to push up their wages to attract those new workers, and we would start seeing stronger upward pressure on both wages and prices”, said Andrew Levin, an economist at Dartmouth and former Yellen adviser. In November, however, payrolls rose by 211,000, the recent report reveals.

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.

Data released by the Department of Labor demonstrate a resilient us economy driven by consumer spending and job creation, despite the dollar being very strong at the moment.

Ms Yellen, in a question on a separate issue, said the USA may be “close to the point at which we should be raising” a benchmark interest rate that has been held near zero since the onset of the financial crisis seven years ago.

Americans are eating out more often, driving restaurant sales much higher. “While much of the service sector is growing albeit with low wages, our goods-producing economy is struggling under the yoke of global weakness and China’s massive industrial overcapacity”. A unique feature of the economy over the last 6 years is that there are more jobs, but income has dropped. The increase is in line with the average monthly gain of 237,000 over the prior 12 months, according to the BLS.

Retail added a seasonally adjusted 31,000 jobs in November after October’s gain of 41,000. The consensus forecast was for an increase of 200,000 jobs.

US crude was up 1.6 percent at $40.58 a barrel after dropping 4 percent overnight, with Brent up more than 2 percent at $43.40.

The average workweek for all employees on private nonfarm payrolls edged down by 0.1 hour to 34.5 hours in November.