Strong November job gains and a steady unemployment rate may lead Federal Reserve to increase interest rates
According to the Bureau of Labor Statistics’ (BLS) most recent Employment Situation Summary, the U.S. economy added more jobs in November than originally anticipated (+211,000) while the unemployment rate held steady at 5 percent.
Job gains for September and October were upwardly revised by 8,000 and 27,000, respectively, a total net gain of 35,000 jobs. November employment growth was driven by strong gains in the construction industry (+46,000), retail trade (+31,000), food services and drinking places (+32,000), healthcare (+24,000) and professional and technical services (+28,000).
Many economists believe the latest BLS report is strong enough to give Federal Reserve officials confidence to raise interest rates later this month for the first time in nearly a decade.
Randstad's U.S. Employee Confidence Index (ECI)
Randstad’s U.S. Employee Confidence Index (ECI) remained largely unchanged in Q3 2015 at 61.8, falling just one-tenth of a percentage point from 61.9 in Q2 2015. However, employee confidence remains exceptionally high, with 2015 marking the first year the U.S. ECI has reached 60.0 points or higher since the survey’s inception in 2004.
U.S. Job Gains
The nation’s employers added 211,000 new jobs in November, which lifted average monthly job growth to 209,000 so far this year. While that figure is below last year’s average pace of 260,000 jobs per month, it is strong enough to keep optimism levels high among economists.
U.S. Unemployment Rate
The U.S. unemployment rate held steady at 5 percent in November and has decreased by 0.8 percentage point over the past 12 months. At the end of November, long-term unemployment remained relatively unchanged at 7.9 million.
U.S. Unemployment Rate by Industry
Most companies added to their payrolls in November, with the exception of the energy and motion picture industries.
Construction firms hired 46,000 people, food services and drinking places added 32,000 jobs and retail trade employment increased by 31,000 jobs.
Other industries that showed substantial growth in November include healthcare (+24,000), accounting and bookkeeping services (+11,000) and computer systems design (+5,000).
Temporary Help Services Sector
Following October’s gain of 28,100 new jobs, the temporary help services sector declined considerably in November with a loss of 12,300 jobs. The decrease brings the sectors’ total number of jobs to 2,916,600, a 0.4 percent downturn from October. However, the sector is up 2.6 percent from November 2014 and stands at 2.04 percent market share.
Average Weekly Earnings
Average hourly earnings rose 4 cents in November to $25.25, driving the 12-month wage growth rate down 2.3 percent from 2.5 percent in October. However, economists still expect the creation of millions of new jobs and a decreasing unemployment rate to put more upward pressure on wages in the near future. Wage growth has been well below the 3 to 3.5 percent gains that are common at the height of a recovery.
With November’s job gains, the nation has now added 2.3 million jobs this year, which is stronger than any year over the past decade aside from 2014. Although wages are up slightly for the year, economists say many companies are finding it more difficult to fill positions. In addition, government data shows that job openings are taking longer to fill.