Another 211,000 jobs created in US in November

Job seekers at the HireLive Career Fair in San Francisco, California, last month. The 211,000 increase in the United States' payrolls followed a 298,000 gain in October that was bigger than previously estimated, a Labour Department report showed yest
Job seekers at the HireLive Career Fair in San Francisco, California, last month. The 211,000 increase in the United States' payrolls followed a 298,000 gain in October that was bigger than previously estimated, a Labour Department report showed yesterday.PHOTO: AGENCE FRANCE-PRESSE

Healthy hiring rate raises odds that Fed will raise interest rates this month

NEW YORK • Employers in the United States added more jobs than forecast last month, 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 Labour Department report showed yesterday. 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 towards the central bank's inflation goal and probably depends on how quickly wage pressures mount as the job market tightens.

"The labour market is pretty solid," said chief financial economist Ward McCarthy of Jefferies in New York before the report. "We're getting far enough into the labour market expansion that we should start to see some sustained acceleration in wage growth."

Employment last month was spurred by the biggest increase in construction hiring since January last year. Retailers, healthcare 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-speciality contractors, while payrolls at retailers rose by almost 31,000 last month, a step down from the month before.

Derived from a separate Labour Department survey of households, the underemployment rate, which includes part-time workers who 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 a rise in the number of Americans working part-time for economic reasons. The labour force participation rate - the share of working-age people who are employed or looking for work - rose to 62.5 per cent from 62.4 per cent. Participation has declined this year, part of a broader trend that Dr Yellen has said is linked to the ageing of the population. "I don't think we should expect to see labour force participation move up a great deal over time," she told the Congress Joint Economic Committee on Thursday. "If it were simply stable over time rather than on that declining trend, I think we would be absorbing people who were perhaps discouraged."

With the Fed widely expected to raise rates in less than two weeks, the November job data will likely be used to guide the pace of future increases.

Progress in the labour market has played a large role in building the Fed's confidence that the economy can withstand higher interest rates.

The second part of the central bank's dual mandate - stable prices - has been more elusive.

The Fed's 2 per cent target for inflation has not be met since April 2012.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on December 05, 2015, with the headline 'Another 211,000 jobs created in US in November'. Print Edition | Subscribe