Unemployment Drops for Black Americans and High School Grads

America faces the prospect of at least two interest rate rises next year after a key employment report showed solid jobs growth and falling unemployment in the world’s biggest economy. TheStreet’s Scott Gamm reports from Wall Street.

The U.S. economy gained 178,000 non-farm jobs in November and the unemployment rate fell to 4.6 percent, the Bureau of Labor Statistics reported Friday. The key data points. Earnings are up at a 2.5% annual rate.

President Obama is handing off a relatively healthy US economy to his successor.

However, all areas of the state continue to report unemployment rates below 5.6 percent, and 13 of the 17 regions showed rates below the national average of 4.7 percent.

The “real” unemployment rate, otherwise known as the U-6 measure, was 9.3 percent in November, which declined from 9.5 percent in the previous month. While the OPEC decision sent oil prices up, the commodity still hasn’t recovered from a substantial and stubborn price drop two years ago, from more than $110 per barrel to, at most, the low $50s.

US stocks edged higher on the latest jobs news, as the numbers offered no new surprises to investors.

While a surge in USA government bond yields and a rally in the dollar in the wake of Donald Trump’s election as the next U.S. president had tightened financial market conditions, economists said it was probably insufficient for the Fed to stand pat on rates this month. But it has been a decent year, with stocks up 7.2% heading into today’s trading session.

For a year now, Fed officials have said they expect job growth to slow as the economy nears full employment. Up just 0.3 percent from where the region was at this time a year ago.

Still, the overall economic picture could inspire the Federal Reserve to raise interest rates during its December meeting.

Traders have now priced in a 90.4 percent chance of a hike this month, according to Thomson Reuters data. In November, it fell three-tenths of a percentage point to 4.6 percent.

A rise will have repercussions for the global economy especially in emerging markets which are the most sensitive to higher USA borrowing costs. Market expectations of faster tightening to rein in inflation have pushed long-term interest rates higher. The good news? Interest earned on bank deposits and certificates of deposit should eventually edge higher. “It is now incredibly hard to imagine what would stop the Fed from going”, said Aberdeen Asset Management investment manager Luke Bartholomew. Most of the other major sectors stayed fairly flat.