The US added jobs at a robust pace in November, removing a hurdle to the Federal Reserve’s first increase in short-term interest rates for nearly a decade.
Non-farm payrolls rose by 211,000 last month and a blockbuster figure from October was revised even higher to 298,000, while the unemployment rate held at 5 per cent. The jobs growth was stronger than median forecasts for a 200,000 gain, and firm enough to keep the jobless rate on a downward trend.
The US economy has created 8.1 million jobs over the past three years, the fastest pace since 2000.
The figures are “very solid, very consistent with the Fed hiking”, said James Sweeney, US economist at Credit Suisse. “This suggests the US consumer as a primary engine of global demand remains at full throttle.”
Janet Yellen, Fed chair, this week signalled an interest-rate increase was looking increasingly likely this month as she declared the US economy has “recovered substantially” from the recession and that the central bank had gone a long way towards meeting its goals of maximum employment and price stability.
The jobs figures have played an outsized role in paving the way for the expected increase in rates. Officials argue the tightening labour market should be followed by higher wages and a return of inflation to the Fed’s 2 per cent target.
Job gains were led by construction, where 46,000 positions were added, as well as professional and technical services, healthcare and restaurants and bars.
Manufacturing employment, meanwhile, slipped by 1,000 and jobs in mining and logging, which has been hit by the slump in oil investment, fell by 11,000.
Earnings figures in the Bureau of Labor Statistics report remained subdued. Average hourly earnings were up 2.3 per cent from a year earlier, slower than the 2.5 per cent growth in October, although still higher than the 2.1 per cent reading 12 months earlier.