Hicks: Latest job numbers may cause Fed to raise Interest Rates

The new numbers released by the Department of Labor show how the USA economy is being bolstered by consumer spending and resultant job creation, even as an appreciated dollar and weak overseas growth drags down export-heavy industries.

“To simply provide jobs for those who are newly entering the labour force probably requires under 100,000 jobs per month”, with anything above that helping “absorb” those who are unemployed, discouraged or had dropped out of the labour market”, Ms Yellen, who was speaking before Congress’ Joint Economic Committee, said in a question and answer session.

After hitting a 38-year low in September and October, the labor-force participation rate – which measures the percentage of those who either had a job or searched for one in the past month – ticked up a tenth of a percentage point in November to 62.5 percent from 62.4 percent last month, according to the November jobs report.

The jobless rate is in a range many Fed officials see as consistent with full employment in any case.

Fed fund futures were pricing in a 79 percent chance of a rate increase when the FOMC meets December 15-16. The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) increased by 319,000 to 6.1 million in November, following declines in September and October. Manufacturing contracted in November for the first time in three years. Over the past 12 months, these industries have added 85,000 jobs and 71,000 jobs, respectively. October’s payroll gain of 298,000 was revised up from an initially reported 271,000.

The unemployment rate was unchanged at 5.0 percent, the lowest level in seven years and down from 5.8 percent a year ago, as the USA economy continues to fend off the drag from the slowdown in the global economy. More Americans began looking for jobs in November, and most found them.

Average hourly wages, up 2.3 percent year-on-year in Friday’s Labor Department report, supported Yellen’s argument that wage gains were accelerating after a long period of stagnation.

Employee pay increased at a steady pace last month.

Friday’s government report says job gains were seen in construction, professional services, and health care. “Today’s report reinforces our view that underlying domestic demand appears to be solid enough for the Fed to finally depart from its zero interest rate policy this month”. The Nasdaq composite rose 104.74, or 2.1 percent, to 5,142.27.

At 13:24 a.m. ET (1824 GMT) the Dow Jones industrial average .DJI was up 342.38 points, or 1.96 percent, at 17,820.05, the S&P 500 .SPX was up 37.11 points, or 1.81 percent, at 2,086.73 and the Nasdaq Composite .IXIC was up 92.11 points, or 1.83 percent, at 5,129.64. “Mining and information lost jobs”.