Friday’s US non-farm pay roll figure came in at 178,000, a narrow increase on market predictions of 175,000.
The unemployment figures marks the lowest since August of 2007, which was indicative of a robust American economy. Whilst the markets were underwhelmed, the figures demonstrate an unprecedented 81 consecutive months of private-sector job growth. This is the longest streak on record and means the Obama administration will leave on a positive economic note, after spending the last eight years guiding the country through the aftermath of the 2008 economic crisis.
Nevertheless, wage growth showed minimal growth, with average hourly earnings falling by 0.1 percent after a 0.4 percent rise back in October. The year-on-year growth rate fell to 2.5 percent last month, from 2.8 percent in October. The October increase was the biggest recorded for nearly seven and a half years.
The figures reveal that the US job market has shows minimal yet consistent signs of improvement, with wage growth just beginning to counteract inflation and wages still remain below pre-recession levels.
The figures come a mere two weeks ahead of the scheduled Fed meeting, where the first interest rate hike in eight years is widely anticipated. Earlier in the week, comments by Fed Governor Jerome Powell seemed to confirm a hike was on the cards:
“In my view, the case for an increase in the federal-funds rate has clearly strengthened since our previous meeting” on Nov. 1-2, Fed governor Jerome Powell said earlier this week.
However, many experts have warned that any hikes may indeed prove premature and ultimately, counter-productive to sustaining recovery.
“There’s no reason to preemptively slow the economy down, given that we’re starting from less-than-full employment,” commented Elise Gould, an economist at the Economic Policy Institute in Washington, which is traditionally more left-leaning. “Right now, the priority should be keeping the economy on track and moving it forward.”
Markets reacted by selling off the dollar, with fell 0.4 percent to 91.60 in the immediate aftermath of the announcement.