US jobless rate plunges to 4.6 pct., employers add 178K jobs

USA stocks were mixed Friday, despite a better than expected jobs report.

The data showed that the economy has bounced back since Obama’s first months in office, when the private sector was shedding roughly 800,000 jobs a month and the unemployment rate was at 10 percent. Average hourly earnings fell 0.1% from the month before, and that reduced the annual increase in wages to 2.5% from 2.8% in October.

Employment in the USA increased by a little more than economists had been anticipating in the month of November, according to a report released by the Labor Department on Friday.

In a statement, the White House economist Jason Furman hailed the creation of 15.6 million positions since 2010 and the longest streak of continuous job gains on record.

The job gains for the month came largely from professional and business services and healthcare. Prices for US government bonds rose.

As for the revisions: September’s job totals were revised up, from 191,000 to 208,000, while October’s were revised down, from 161,000 to 142,000. “But in October, wages increased at their fastest pace since the end of the recession – 2.8 percent”.

The labor-force participation rate, those with jobs or actively seeking work, edged down to 62.7% in November from 62.8% the prior month and continues to hover near a four-decade low.

Before these figures the markets were pretty clear about what they think the Federal Reserve will do when it meets later this month; it will raise interest rates.

Hiring is solid and the unemployment rate low. “This report easily clears the bar for a December rate hike”, said Michael Gapen, chief economist at Barclays in NY.

As the labor market nears full employment, job gains have slowed from an average of 229,000 per month in 2015 to an average of 181,000 this year. Manufacturing employment was flat in November, and it’s been down most of the year.

‘This jobs report paves the way for Fed rate hikes, ‘ said Jason Schenker, president of Prestige Economics. “There used to be part of work force that had well-paying jobs that were low or unskilled”.

Using federal funds rate futures prices, which express the market’s views of the likelihood of a Fed interest rate change, as an indicator, the CME Group put the chances of a December 14 rate hike at almost 95 percent as of Friday morning-a more than 2 percent rise in probability over the previous day. It was the second-straight month the labor force shrank. The rise in employment involved gains across various sectors of the economy: construction added nearly 20,000 jobs, health care or social assistance jobs increased by 35,000, and another 63,000 professional jobs were created.

The company hopes to add 3,000 to its 8,000-person staff by June, when moving season heats up. That said, this is a rather strong report. This continues the recovery of the labor market at a tempered rate. The unemployment rate for Americans with a bachelor’s degree or higher dipped to 2.3 percent in November, but the rate for those with less than a high-school diploma rose to 7.9 percent. Initial jobless claims – a reliable gauge of layoffs – fell sharply in the week in which the jobs survey was conducted. In fact, according to the Conference Board, Americans are more confident in the economy than at any other point in the past nine years.