Healthy job and wage growth in November will almost certainly provide the final push the Federal Reserve needs as it mulls an interest rate hike later this month.
The U.S. added 211,000 jobs last month and the headline unemployment rate was 5%, according to figures released Friday by the U.S. Labor Department. Analysts had predicted 200,000 new jobs and that the unemployment rate would hold steady at 5%.
Wages rose modestly, but any increase is a victory. Year over year, average hourly wages rose 2.3% in November, a bit less than the prior month’s growth.
As has been the case in recent months, much of the focus by analysts and investors has shifted away from the top two headline numbers (job creation and the unemployment rate) in favor of wage growth.
Stubbornly weak wage growth has proven a thorn in the Fed’s size as it waits for inflation to rise toward its 2% target. The Fed has said it won’t raise rates until it is “confident” inflation is moving upward toward its goal.
“The most important number to look at in upcoming employment reports is the year-over-year change in average hourly earnings,” Scott Wren, senior global equity strategist at Wells Fargo Investment Institute, said ahead of Friday’s job report.