Employers added more jobs than forecast in November, underscoring Federal Reserve chair Janet Yellen’s confidence that the US 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 per cent. 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.
“The labor market is pretty solid,” Ward McCarthy, chief financial economist at Jefferies in New York, said before the report.
“We’re getting far enough into the labor market expansion that we should start to see some sustained acceleration in wage growth.”
Employee pay increased at a slower pace last month. Average hourly earnings at private employers rose 0.2 per cent in November after a 0.4 per cent gain. Hourly pay climbed 2.3 per cent in November from the same month last year after a 2.5 per cent increase in October.
Employment in November was spurred by the biggest increase in construction hiring since January 2014.
Retailers, health- care providers and leisure and hospitality companies added jobs at a healthy, but slower pace than in October.
Payroll estimates of 91 economists ranged from gains of 130,000 to 275,000 after a previously reported 271,000 October increase.
Revisions to prior reports added a total of 35,000 jobs to overall payrolls in the previous two months.
Construction companies took on 46,000 workers, led by residential specialty contractors, while payrolls at retailers rose by almost 31,000 in November, a step down from the month before.
Derived from a separate Labor Department survey of households, the underemployment rate, which adds in part-time workers who’d prefer full-time positions and people who want to work but have given up looking, crept up to 9.9 per cent from 9.8 per cent in October.
The figure reflected an increase in the number of Americans working part-time for economic reasons, one of Yellen’s favorite measures of labor-market slack.
Bloomberg
