The U.S. job market performed better than November forecasts had predicted, giving credence to Federal Reserve Chair Janet Yellen’s confidence that the economy is strong enough to withstand higher borrowing costs.
The 211,000 added jobs follows a 298,000 gain in October which was also larger than previously estimated. The median forecast for new jobs in November was 200,000. The jobless rate for November stayed at the seven-year low of five percent.
The increase in created job raises the odds that federal officials will raise interest rates this month for the first time since 2006. Future increases will be dependant upon progress towards the central bank’s inflation goal and how quickly wage pressures mount as the job market begins to tighten.
Wells Fargo Securities LLC chief economist John Silva says, “It was a broad-based gain across all sectors, and that’s absolutely essential.” The jobs report “is a bright green signal for the Fed to go ahead and move in December.” He adds that future rate increases should proceed at a “moderate pace.”
Employment in November was spurred by the largest increase in construction hiring since January 2014, and saw 46,000 new workers employed. Most went to residential specialty contractors. The increase was aided by warmer weather which allowed for outdoor construction projects to continue well into November across much of the U.S.
Retailers, health-care providers and leisure and hospitality companies added jobs at a healthy, but slower pace than in October. Retail jobs increased by 31,000 in November mainly due to Thanksgiving sales and for the build-up to holiday season shopping.
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.
Employee pay also increased at a steady pace in November. The average hourly earnings 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.