U.S. Job Growth Solid for November

The economy has added jobs for 69 consecutive months.

The unemployment rate was unchanged at 5.0 per cent, the lowest level in seven years, as the economy continues to fend off the drag from the slowdown in the global economy.

But a measure of service-sector employment fell last month and consumer perceptions of job availability were dimmer.

September and October data was revised to show 35,000 more jobs than previously reported. The gains “really erase the stench of that August and September mess”. Most economists have forecast that it will grow at a still relatively subpar 2.5 percent this year, only slightly above its average pace since the recession officially ended in mid-2009.

Employment gains in November were broad-based, though manufacturing shed 1,000 positions. Over the past year, construction employment has grown by 259,000.

Construction firms added 46,000 jobs, the most in two years.

Pay gains last month were modest.

November 2015’s unemployment report is a rather mixed bag.

Restaurants and bars added 32,000 jobs; retail, 31,000; professional and technical services, 28,000; and health care, 24,000.

Mining lost 11,000 jobs; this area includes jobs in oil drilling and support services.

Mining employment has declined by 123,000 since reaching a peak in December 2014. Manufacturing contracted in November for the first time in three years. It is imperative to state that employers have now added an average of 213,000 a month over the last six months. That reflected an increase in part-time workers.

Average hourly earnings increased 4.0 cents, or 0.2 percent from 0.4 percent in October. The average workweek, however, dipped to 34.5 hours from 34.6.

The jobs figures have played an outsized role in paving the way for the expected increase in rates.

“A significant number of individuals now classified as out of the labor force would find and accept jobs in an even stronger labor market”, she said.

The jobs report was released just a day after Ms. Yellen told federal regulators that the USA economy finally met the criteria the Fed wanted for an interest rate rise.

Yellen has not quite come out and said explicitly that 100,000 new jobs is the green light for a December rate hike, but she’s dropped about as many hints as the Fed ever does about the future course of economic policy.

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.

“It’s hard not to like today’s reading on the labor market”. The economy has added jobs for 69 consecutive months, gaining more than 13.7 million jobs.

The report, which was issued by the U.S. Labor Department on December 4, shows that nonfarm payrols rose twice as much as Fed analysts had estimated that it would be healthy to the economy.

Over the past few months, the Department of Labor has stressed wages, which it said was “the unfinished business of this recovery”. The employment-population ratio remained where it was a month ago at 59.3 percent. Many who are not in the labor force are going to school or are retired. It suggests that labor-market slack still is greater than the 5% unemployment rate would strictly indicate. So, we’re not yet at the point where demand pushes economic growth.

Yesterday, Yellen said, “I think we’ve seen some welcome hints” of wage increases, but she cautioned, “it’s tentative evidence; we don’t know if it will last”.