Anything For You All: America nails it

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December 04, 2015

On Friday morning, the November jobs report paved the way for the Federal Reserve to raise its benchmark interest rate in two weeks.

The Bureau of Labor Statistics reported that the US economy added 211,000 jobs in November, while the unemployment rate held steady at a seven-year low of 5%.

Economists had estimated that nonfarm payrolls grew by 200,000 jobs last month, while the unemployment rate was unchanged at 5%.

Average hourly earnings grew 0.2% month-on-month, unchanged from October. Compared to the same month last year, earnings growth was also unchanged, at 2.3%.

And, the labor force participation rate was little changed from the prior month, at 62.5%.

This report was the last big data point ahead of the Fed's two-day policy meeting in two weeks. Economists had expected that a report that was just good enough would cement the Fed's conviction to hike rates for the first time in nine years.

"Instead of wasting time focusing on abstract concepts such as equilibrium interest rates and NAIRU [or, the non-accelerating inflation rate of unemployment], perhaps the Fed should just see what is happening in front of its face," wrote Renaissance Macro's Neil Dutta in a client note. "The message from November's jobs is clear, the US labor market is unambiguously strengthening."

In remarks earlier this week, Fed chair Janet Yellen said the labor market's progress was healthy enough to boost confidence that the Fed may reach its 2% inflation target soon.

Gains in construction, health care, and professional and technical services boosted growth in November, as mining and information jobs were trimmed.

And, the October print of jobs growth was revised up to 298,000 from 271,000, making it the best month for American jobs growth this year.

All this, then, would intensify the debate, and forecasts, about the pace of interest rate hikes, as the Fed likely proceeds to continue easing monetary policy.

Via Bloomberg, here's what Wall Street had expected: