5th December 2014
Strong jobs figures from the US exceeded expectations again with the highest single month job gain since January 2012 reported.
The gain of 321,000 jobs in November was well ahead of consensus forecasts of 230,000 and even the more optimistic figure of 250,000 that was unofficially spoken about. Further good news came from the revision to the previous two months’ numbers which totalled 44,000 extra jobs.
Professional/ business services and retail led the way gaining 86,000 and 50,000 jobs respectively.
‘This provides further evidence of a robust recovery and the coming months could see further improvements as the US economy benefits from the slump in the oil price. All this will add to speculation that a tightening of monetary policy is imminent,’ said Ben Brettell, senior economist at Hargreaves Lansdown.
‘However, the Fed finds itself in a very similar position to the Bank of England – economic growth and employment are both strong, but the lack of wage growth is the fly in the ointment.
‘Today’s report showed average hourly earnings rose 2.1% year-on-year, but consensus opinion is that the Fed will want to see growth of 3% before considering higher rates. For this reason it looks unlikely that US rates will start rising under the second half of next year.’