US adds healthy 211K jobs; unemployment steady at low 5 pct

WASHINGTON | The U.S. economy generated another month of solid hiring in November, making it highly likely that the Federal Reserve will raise interest rates from record lows this month. Payrolls climbed by 211,000 last month following a 298,000 gain in October that was larger than previously estimated, Labor Department figures showed Friday.

Not including the farm sector, the number of new jobs created rose by 211,000 in November. The consensus forecast was for an increase of 200,000 jobs.

Job growth has averaged 218,000 the last three months – and for the 12 months ended November 30, the labor market has added an average of 237,000 net new positions. Though Yellen said Thursday that the Fed looks forward to a rate hike as proof of the economy’s recovery, the central bank faces an increasingly weighty decision.

“We have added more jobs over the past three years than in any three-year period since 2000, and wages are continuing to rise”, Jason Furman, chairman of the president’s Council of Economic Advisers, said in a statement. “The unemployment rate…sits at a seven and a half year low, highlighting the tightness of the labour market by historical standards”.

Yet the continued sluggishness of wage gains, and the high numbers of part-time workers remain signs of persistent slack in the jobs market.

For months now, the November jobs report has been hotly anticipated as a marker not just for how well the economy is doing, but a hint at how the country’s most important bank would move to shape it. Happily, it did not disappoint.

While the jobless rate remained the same, average hourly earnings crept up – by four cents – following a sharp increase the previous month.

The data added support for the confidence that Fed chair Janet Yellen expressed on two occasions this week that the USA economy is growing at a steady, moderate pace and will continue to do so for the next few years, and is resilient enough for higher rates.

The report is the final key piece of the current economic puzzle for Fed officials, who have made a strong case in recent weeks for raising interest rates at their December meeting from near-zero, where they have been since the depths of the financial crisis 2008.

“They’re back at work at jobs that have a higher than average hourly wage”, says Patrick O’Keefe, former deputy assistant secretary for the Department of Labor, now director of economics at CohnReznick accounting and consulting. It’s not flawless, but it does appear ready for a rate hike.

Restaurants and bars added 32,000 jobs; retail, 31,000; professional and technical services, 28,000; and health care, 24,000. A decline in manufacturing activity stemming from a drop in exports caused by the strong dollar would weigh on domestic-demand-linked industries such as logistics as well.