The Labor Department reported on December 5th that nonfarm employers increased 321,000 jobs in November. This is the highest monthly increase since January 2012. Unemployment rate decreased 1.2% from November of last year, but remained constant since last month rate of 5.8%. Estimates show that 2014 will be the best year for job growth since 1999.
It was also reported that average hourly earnings for the private-sector worked increased in the month of November. The average hourly earnings increased .4% from October, to $24.66. This is a 2.1% increase from November 2013. Economists are expecting wages to continue increasing as unemployment falls. Companies will have to increase pay in order to become more appealing to a shrinking pool of available workers.
November’s increase in payroll and wages could contribute to an increase in spending during this holiday season. If consumption rises and jobs added continue to grow, the Fed could rapidly reach its goal of low unemployment rate and a higher inflation of 2%. This could lead to an increase in short-term interest rate faster than economists are expecting.
Sources: WSJ and NY Times
By: Natalia Graca