U.S. employment increased strongly in November in a show of the economy’s resilience, which most likely paves the way for the Federal Reserve to raise interest rates this month for the first time in nearly a decade.
Nonfarm payrolls rose 211,000 last month, the Labor Department said on Friday. September and October data was revised to show 35,000 more jobs than previously reported.
The unemployment rate held at a 7-1/2-year low of 5 percent, even as people returned to the labor force in a sign of confidence in the jobs market. The jobless rate is in a range many Fed officials see as consistent with full employment and has dropped seven-tenths of a percentage point this year.
“The employment report should remove the final doubts about a rate hike at the December meeting. The clear message from the labor market to the Fed is: ‘Just do it!'” said Harm Bandholz, chief U.S. economist at UniCredit Research in New York.
The closely watched employment report came a day after Fed Chair Janet Yellen struck an upbeat note on the economy when she testified before lawmakers, describing how it had largely met the criteria the U.S. central bank has set for the Fed’s first rate hike since June 2006.
Yellen said the economy needs to create just under 100,000 jobs a month to keep up with growth in the working age population.
The Fed’s policy-setting committee will meet on Dec. 15-16. Market-based measures of Fed policy expectations assign a probability of 79.1 percent to the central bank’s raising interest rates at that meeting, according to the CME Group’s FedWatch site.
U.S. Treasury debt prices initially fell on the data, but later reversed losses on news OPEC was raising its output ceiling despite lower oil prices. The dollar rose against a basket of currencies and U.S. stocks were trading higher.