USA adds 211000 jobs in Nov’15, beat estimates

The unemployment rate held at a seven-year low of 5.0 percent, and job creation numbers for the previous two months were revised upward, more indication that the USA economy remains strong despite the global slowdown.

The economy produced another sturdy gain in new jobs in November, all but guaranteeing the Federal Reserve will raise US interest rates later this month in response to a tightening labor market.

Average hourly employee earnings rose by $0.04 or 0.2 percent to $25.25 in November after climbing by $0.09 in September.

“The bottom end of the range of forecasts in Reuters polls on non-farm payroll figures for the coming year has been consistently trimmed lower by analysts over the past few months – just 100,000 jobs per month on average in some quarters of next year”, writes Siddharth Iyer at Reuters’ blog Macroscope.

As Federal Reserve Chair Janet Yellen has explained it, the drop in the labor force participation rate since 2008 can be attributed to four factors: a greater number of retiring Baby Boomers as well as an increase in the disability rolls, an increase in school enrollments and general “worker discouragement”. Manufacturers, who have been strained by the strong dollar hurting exports, have struggled recently, shedding 1,000 jobs in November. With these revisions, employment gains in September and October combined were 35,000 more than previously reported.

Economists had expected 190,000 new jobs. “The job market still has a lot of steam and the Fed should be comfortable raising interest rates”. The unemployment rate was in line with expectations. Manufacturing contracted in November for the first time in three years. The robust hiring indicates that consumer spending is powering the economy even as weak growth overseas and low oil prices squeeze USA manufacturers and drillers.

But Yellen cautioned that they would not be swayed by any single economic report and instead would look at the jobs data in the context of underlying trends.

However, employment in mining decreased by 9,000. The services sector will likely account for the bulk of the increase in employment, but retail and courier payrolls are a wild card as company are now starting their holiday hiring a bit earlier than in prior years. Since December 2014, mining employment has declined by 123,000.