By Lucia Mutikani
U.S. job growth increased solidly in November in a show of the economy’s resilience, which most likely paves the way for the Federal Reserve to raise interest rates this month for the first time in nearly a decade. Nonfarm payrolls increased 211,000 last month, the Labor Department said on Friday. The jobless rate is in a range many Fed officials see as consistent with full employment and has dropped seven-tenths of a percentage point this year.
Nonfarm payrolls rose 211,000 last month, the U.S. Labor Department said on Friday. September and October data was revised to show 35,000 more jobs than previously reported.
The unemployment rate held at a 7-1/2-year low of 5.0 percent, as people returned to the labor force in a sign of confidence in the jobs market. The jobless rate is in a range many Fed officials see as consistent with full employment and has dropped seven-tenths of a percentage point this year.
“The employment report should remove the final doubts about a rate hike at the December meeting. The clear message from the labor market to the Fed is: ‘Just do it!'” said Harm Bandholz, chief U.S. economist at UniCredit Research in New York.
The closely watched employment report came a day after Fed Chair Janet Yellen struck an upbeat note on the economy when she testified before lawmakers, describing how it had largely met the criteria the U.S. central bank has set for the Fed’s first rate hike since June 2006.
Yellen said the economy needs to create just under 100,000 jobs a month to keep up with growth in the working age population.
A Reuters survey of banks that deal directly with the Fed showed all but one of the so-called primary dealers expect the Fed will hike rates at the Dec. 15-16 meeting. They see only a gradual pace of monetary policy tightening through 2016.
The U.S. dollar firmed against the euro after European Central Bank President Mario Draghi said in New York that the ECB could deploy more stimulus if needed. U.S. Treasury debt yields initially rose, but later fell after OPEC failed to agree an oil production ceiling. U.S. stocks ended higher.
The second month of strong job gains should allay fears the economy has hit a soft patch, after reports showing tepid consumer spending in October and a slowdown in services industry growth in November. Manufacturing contracted in November for the first time in three years, according to one business survey.
A strong U.S. dollar and spending cuts by energy companies have been headwinds to the economy. A separate report from the U.S. Commerce Department on Friday showed the international trade deficit widened in October as exports hit a three-year low.
Though wage increases slowed last month, economists say that was mostly payback for October’s outsized gains, which were driven by a calendar quirk. Anecdotal evidence, as well as data on labor-related costs, suggest that tightening job market conditions are starting to put upward pressure on wages. Outer Banks New Homes for Sale Corolla, NC