Economy sees 321,000 jobs added in November
Washington (Dec 6) A burst of U.S. hiring in November — the most in nearly three years — added 321,000 jobs and provided the latest evidence that the United States is outperforming other economies throughout the developed world.
In addition, the government said Friday that 44,000 more jobs were added in September and October combined than it had previously estimated. So far this year, job gains have averaged 241,000 a month, putting 2014 on track to be the strongest year for hiring since 1999.
The unemployment rate remained at a six-year low of 5.8 percent.
“These were boom-like numbers,” said Mark Zandi, chief economist at Moody’s Analytics. “They indicate that the U.S. economy is on very solid ground.”
November’s robust job growth, reflecting a steadily rising economy, makes it likelier that the Federal Reserve will start raising interest rates by mid-2015 as many economists have speculated. The Fed has kept its key short-term rate at a record low near zero since 2008 to support the economy.
Friday’s jobs report also raised hopes that Americans’ pay might finally be starting to increase after barely budging since the Great Recession began seven years ago. The average hourly wage rose 9 cents in November to $24.66, the biggest gain in 17 months.
“The wage numbers are a wake-up call for the Fed,” said John Silvia, chief U.S. economist at Wells Fargo Securities.
Silvia noted that Fed Chairwoman Janet Yellen has pointed to stagnant wages as a key reason to keep rates low. Higher wages could lead to higher prices, and the Fed might feel compelled to raise rates to limit inflation.
Over the past 12 months, hourly pay has risen just 2.1 percent, barely above the 1.7 percent inflation rate. And Scott Anderson, an economist at Bank of the West, noted that inflation remains below the Fed’s 2 percent target rate and will likely remain muted because of declining oil and gas prices. That might give the Fed some leeway to wait.
Investors welcomed Friday’s positive news: The Dow Jones industrial average jumped 58.69 points to 17,958.79 at the end of trading. The yield on the 10-year Treasury note rose to 2.32 percent, from 2.25 percent, a sign that investors foresee a Fed rate increase relatively soon.
Hiring last month was boosted by seasonal hiring related to the holiday shopping season. Retailers added 50,200 jobs, the most in 11 months. Transportation and warehousing gained 16,700.
Shipping companies have announced ambitious plans, after some holiday gifts that were ordered online arrived late last year. UPS has said it expects to add up to 95,000 seasonal workers, up from 85,000 last year. FedEx plans to hire 50,000, up from 40,000.
Many analysts forecast the economy will grow 3 percent next year. If so, 2015 would mark the first time in a decade that annual growth would reach that threshold.