November was a good month for U.S. employment as the largest number of workers in three years joined the labor force. In addition, wages were up, another indication that the economy was strengthening.
The Labor Department reported on Friday that nonfarm payrolls rose by 321,000, the most since January 2012 while the unemployment rate held steady at a six-year low of 5.8 percent.
According to Robert Dye, Chief Economist at Comerica in Dallas "This greenlights a Fed lift-off in mid-2015," referring to the possibility that the Federal Reserve would be raising interest rates.
November's job numbers exceeded Wall Street's expectations of only 230,000 and showed the 10th straight month that job growth has exceeded 200,000, the longest period since 1994. The economy added 2.65 million jobs over the last 11 months, surpassing the 2.33 million created in 2013.
Economy Strong
Economists interpret these numbers as an indication that the economy is enduring the slowdowns in China and the euro zone, as well as a recession in Japan. In a separate report, the Commerce Department showed that exports rose 1.2 percent in October, helping to narrow the trade deficit slightly while exports to the European Union, China and Japan also increased.
The employment report provided the latest sign that a strengthening jobs market is starting to spur faster wage growth, an important factor that will help determine just when the U.S. central bank will begin lifting borrowing costs. At the same time, the average hourly earnings rate rose by 9 cents in November, the largest increase since June of last year.
"The November wage increase is a warning that labor market conditions are already starting to turn," said Joel Naroff, Chief Economist at Naroff Economic Advisors in Holland, Pennsylvania. "I suspect the Fed will be talking about a tightening labor market at its next meeting."
The positive employment data buoyed U.S. stocks and helped lift the dollar to a 5-1/2-year high against a basket of currencies as traders anticipated an earlier Fed move. The yield on the two-year Treasury note hit a 3-1/2-year high.