The US economic rebound continues to gain momentum as the latest job numbers surpass forecasts and mark the largest jump in three years.
According to today’s non-farm payroll figures, the world’s largest economy added a total of 321,000 jobs in November, significantly beating the consensus prediction of 230,000.
In addition, further upbeat news was provided in the shape of positive revisions to the previous two months’ numbers totaling 44,000 jobs. The dollar surged following the news.
According to Capital Economics, the gains in payrolls were widespread, with the 50,000 gain in retail suggesting that retailers expect a strong holiday season. Elsewhere manufacturing, construction and business services all enjoyed strong gains.
Commenting on the expectation beating numbers Hargreaves Lansdown senior economist Ben Brettell says: “This provides further evidence of a robust recovery and the coming months could see further improvements as the US economy benefits from the slump in the oil price. All this will add to speculation that a tightening of monetary policy is imminent.”
Capital Economics chief US economist Paul Ashworth notes however that the unemployment rate remained unchanged at 5.8 per cent, as he points out that the alternative household survey measure of employment increased by only 4,000, while the labour force increased by 119,000.
He adds: “However, it’s important to remember that 4,000 employment gain follows a massive 683,000 increase in October.”
There was even some evidence of stronger wage growth, notes Ashworth given that the average hourly earnings increasing by a larger 0.4 per cent month-on-month. However, the annual growth rate only edged up to 2.1 per cent, from 2 per cent.
“Overall, more evidence of how rapidly labour market conditions are improving. The question now is how will the Fed respond at its mid-December meeting. If it drops the “considerable time” language a March rate cut would still be very much on the table,” adds Ashworth.