The first Friday of the month at 8:30 EDT is widely anticipated by market participants as the Labor Department presents a fresh gauge of the most recent economic performance in its release of the labor report for the prior month. Today’s number was even more closely watched since it will be the most up to date information on the labor market that the Federal Reserve has prior to its FOMC meetings on December 15th and 16th. At these meetings, the Fed will assess the state of the economy and determine whether or not it should raise its benchmark interest rate which has been near zero since the depths of the recession in late 2008.
For November, a 211,000 job gain was reported, near market expectations, while the prior two months were upwardly revised by a combined 35,000 jobs. The unemployment rate stayed steady at 5.0% and near a level considered to be “full employment”. The wider measure of unemployment, the U-6 measure, was 9.9%. Wage growth came in at 2.3% from year-earlier levels.
A separate report, issued earlier this week, showed unit labor costs, were up by 1.8% on an annualized basis in the third quarter. Over the past 12 months, unit labor costs were up by 3.0%, while hourly compensation was up by 3.6%. Anecdotal evidence from operators also suggest wage pressures are starting to mount, an important consideration for business plans for 2016.
Source: Bureau of Labor Statistics
The report suggests that the economy is strong enough to withstand the effects of higher interest rates. Earlier this week, Federal Reserve Chairwoman Janet Yellen made comments suggesting a rate hike was imminent as well.