US Economy Gains New Jobs; Unemployment at 7-year Low

Employers have now added a robust average of 213,000 jobs a month over the past six months.

“It was encouraging that job growth has become more broad-based”, said Ryan Sweet, director of real time economics at Moody’s Analytics.

Yellen’s comments on inflation were the critical missing ingredient from the Fed’s September rate-setting meeting.

The Dow Jones industrial average rose 369.96, or 2.1 percent, to 17,847.63.

In other words, the Fed was pretty well set on hiking rates this month for the first time in almost a decade and it would have taken a drastically poor report to stay its hand.

“Over the past 3 months, the economy has created an average of +218k jobs per months”.

Gold rallied strongly despite November’s better than expected U.S. non-farms payroll report.

Some who have recently looked for work report more success than they encountered in previous job hunts. The unemployment rate has been cut in half, down from a peak of 10% in October 2009.

Wages, too, may be approaching an inflection point after years of tepid gains. About 273,000 people joined the labor force last month, lifting the closely watched participation rate up a bit to 62.5 percent, though still a historically low level.

The moderate growth pace “will be sufficient to generate additional increases in employment, further reductions in the remaining margins of labor market slack, and a rise in inflation to our 2 per cent objective”, she said. The personal consumption expenditure deflator excluding food and energy, the central bank’s preferred price indicator, has risen just 1.3%, less than the 2% target.

Federal Reserve governor Janet Yellen, in a speech on December 2, said that the improvements in the employment picture were an important factor in determining the Fed’s interest rate decision.

If the Federal Reserve needed any final evidence that the economy is ready for higher interest rates, it got it on Friday.

“With the labor market nearing full employment, stronger wage increases may be in the offing”, said Jim Baird, chief investment office at Plante Moran Financial Advisors.

While the report was positive, House Ways and Means Committee Chairman Kevin Brady said more needs to be done to improve the economy.

Whirlpool uses outside firms to help screen candidates and has turned more to job fairs and advertising to help recruit in certain parts of the country.

“It’s hard not to like today’s reading on the labor market”.

There was a 4-cent increase in average hourly earnings last month, bringing the figure to $25.25.

The report also highlighted the divide between domestic and global economic forces.

Mining has been walloped by low oil prices, shedding 11,000 jobs last month.

Construction payrolls increased 46,000 last month, the largest gain since January 2014. Some signs have suggested that wages are beginning to pick up after barely moving in the more than 6 years since the Great Recession officially ended.

The trade deficit rose in October as exports hit a three-year low.