November payrolls increased more than anticipated
The U.S. added more jobs than expected in November, while the unemployment rate held at a seven-year low, solidifying thoughts that the Federal Reserve would hike interest rates later in the month.
"The employment report was the final nail in the coffin that we're going to see a rate rise," JJ Kinahan, chief strategist at TD Ameritrade, said.
The economy added 211,000 jobs last month, the Labor Department said Friday. The unemployment rate remained unchanged at 5 percent.
Economists had forecast that Friday's report would show that 200,000 more jobs were added last month and that the unemployment rate remained at 5 percent, according to data firm FactSet.
Friday's jobs report is getting extra attention, as it is the last major U.S. data point the Federal Reserve will review before it meets later this month to consider raising interest rates. Investors expect the central bank to raise rates from a record low at the Dec. 15-16 meeting.
Construction firms added 46,000 jobs, the most in two years. Construction spending has jumped to the highest level in eight years, boosted by more homebuilding and development of more roads and infrastructure.
Government added 14,000 positions, and retail jobs grew nearly 31,000. Factories shed 1,000 jobs.
Even with strong hiring over the past year, wage growth has remained perhaps the job market's biggest weakness since the recession ended. Average hourly pay has grown at only about two-thirds of the pace typical of a healthy economy. Some economists point to the lagging pay as evidence that the job market isn't as healthy as the low unemployment rate would suggest.
Average hourly earning rose 4 cents to $25.25 last month; average hourly earnings have risen by 2.3 percent over the past year.
With the number of unemployed dwindling, companies eventually should feel compelled to offer higher pay to attract and keep workers. Thicker paychecks, in turn, typically boost consumer spending and drive economic growth.
There were revisions: September was revised up by 12,000 to 145,000; October's strong report was from 271,000 to 298,000.
The Labor Department said job gains have averaged 218,000 per month over the past three months.