Employers added more jobs than forecast in November, underscoring Federal Reserve Chair Janet Yellen’s confidence that the U.S. economy is strong enough to withstand higher borrowing costs.
The 211,000 increase in payrolls followed a 298,000 gain in October that was bigger than previously estimated, a Labor Department report showed Friday. The median forecast called for a 200,000 advance. The jobless rate held at a more than seven-year low of 5 percent.
A healthy rate of hiring has raised the odds that Fed officials will raise interest rates this month for the first time since 2006. The pace of future increases is contingent on progress toward the central bank’s inflation goal and probably depends on how quickly wage pressures mount as the job market tightens.
“It was a broad-based gain across all sectors, and that’s absolutely essential,” said John Silvia, chief economist at Wells Fargo Securities LLC in Charlotte, North Carolina, whose forecast for payrolls was among the closest. The jobs report “is a bright green signal for the Fed to go ahead and move in December,” and indicates future rate increases should proceed at a “moderate pace.”
Employee pay increased at a steady pace last month. Average hourly earnings at private employers rose 0.2 percent in November after a 0.4 percent gain. Year-over-year hourly pay rose 2.3 percent after a 2.5 percent gain a month earlier.
Unemployment down, wages up, and it looks like the Fed is finally going to start getting us out of zero percent interest rates. How much of a rate hike in December, we don't know, but the US economy is now sailing along.
That does mean however that as the Fed slows down the economy a bit, that it could have effects on the 2016 election. Whether or not raising interest rates will be enough cover if job numbers go negative, well that's up to Janet Yellen and crew, right?
We'll see.
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