A positive jobs report for November “all but guarantees” the Federal Reserve will raise U.S. interest rates later this month, experts say.
Total non-farm payroll employment increased by 211,000 in November, and the unemployment rate was unchanged at 5%, the Labor Department said Friday. While the number of unemployed persons, at 7.9 million, was essentially unchanged from a month earlier, the unemployment rate and the number of unemployed persons over the past 12 months were down by 0.8 percentage point and 1.1 million, respectively.
“The message from November’s jobs is clear: The U.S. labor market is unambiguously strengthening,” Neil Dutta, head of U.S. economics at Renaissance Macro Research, told MarketWatch.
Wage growth eased a bit last month, with average hourly earnings for all employees on private non-farm payrolls rising by 4 cents to $25.25, following a 9-cent gain in October.
“Still, economists expect the creation of millions of new jobs and a falling unemployment rate to put more upward pressure on wages in the near future,” MarketWatch said. “Wage growth has been limited to about 2% a year since 2010, well below the 3% to 3.5% gains that are common at the height of a recovery.”
Friday’s strong jobs report “all but guarantees” the Fed later this month will raise its benchmark short-term interest rate above zero for the first time since 2008, according to MarketWatch.
“The jobs report was music to the ears of the Federal Reserve,” Joseph Lake, global economist at the Economic Intelligence Unit, told the publication.
The central bank’s policy-setting committee will meet on Dec. 15-16. Fed Chair Janet Yellen told Congress in testimony on Thursday that the central bank was looking for “a solid trend in job creation.”
Over the past three months, the U.S. has generated a healthy average of 218,000 jobs. The government said 298,000 new jobs were created in October instead of 271,000. September’s gain was raised to 145,000 from 137,000.