Roundup: Strong U.S. jobs data pave way for December rate hike

Industry analysts believe the strong U.S. jobs growth in November likely paves way for the Federal Reserve to move up the benchmark interest rates this month.

The total nonfarm payroll employment increased by 211,000 in November, and the unemployment rate remained at 5 percent, the lowest level since April 2008, data from the Labor Department showed Friday.

The job gains in November marked the strongest three years of job creation since 2000, and the unemployment rate has consistently fallen much faster than economists expected and reached 5 percent considerably earlier than projected, Jason Furman, chairman of the Council of Economic Advisers of the White House, said in a statement Friday.

Besides the strong job gains, the average hourly pay also edged up compared with its level a year ago, with average hourly earnings rising 4 cents to 25.25 U.S. dollars in November. Over the year, the figure has risen by 2.3 percent, higher than its level a year ago.

The good news on employment gains in November was also sweetened by revised estimates of job gains in the previous two months, Gary Burtless, a senior fellow at the Brookings Institute, wrote in an article Friday.

The Labor Department revised up previous two months' job gains, with the employment gains in September and October combined 35,000 more than previously reported. Over the past three months, job gains have averaged 218,000 per month.

Fed Chairwoman Janet Yellen said this week that the Federal Open Market Committee, the central bank's policy-setting arm, will assess all of the available data, including the labor market indicators, in their decision-making at the next FOMC meeting on Dec. 15-16.

Yellen also said at two different occasions this week that the U.S. economy is performing as expected, signaling that she is ready to raise interest rates later this month, preventing a surprise in markets or the economy.

In her testimony before Congress Thursday, Yellen said the economy needs to add roughly 200,000 jobs a month to keep the labor participation rate steady and draw back workers who have dropped out of the workforce. In this regard, the job market has met the Fed's standard to begin monetary policy tightening, analysts say.

Due to the low inflation level, the Fed is still keeping the interest rate near zero. But Fed officials, including Yellen, are expecting the inflation will gradually go up in the medium run.

At an event at the Economic Club of Washington D.C. Wednesday, Yellen said that economic and financial information received since the October FOMC meeting has been consistent with the panel's expectations of continued improvement in the labor market, which helps strengthen confidence that inflation will move back to the 2 percent objective over the medium term. Endit