The US economy is looking healthier than expected, with new reports stating that the job growth in November was better than expected.
Analysts expected job growth in the US to grow by 200,000 last month but the aftermath of two hurricanes and earlier than usual Christmas hiring led to an increase of 228,000 jobs.
Wage increase remains more moderate, rising 2.5 percent year-on-year.
The chief economist at Naroff Economic Advisors, Joel Naroff, said: “The labor market is in great shape. Tax cuts should be used when the economy needs tax cuts and it doesn’t need tax cuts right now,”
“When politics and economics are mixed in the stew, the policies that are created often have a very awful smell.”
Republicans believe that a slash to corporate taxes will allow companies to hire more employees due to a boost in revenue. Most economists disagree, arguing that job openings are already at an all-time high on top of increasing struggles by firms to find qualified workers.
Both the manufacturing and retail sectors have seen an increase in jobs, adding 31,000 and 18,700 jobs respectively.
The average workweek also grew in November. Average weekly hours worked increased by 0.5 percent last month – the longest in five months.
“A six-minute increase in the work week does not sound like much, but given the size of the labor market, it turns out to be significant in terms of output,” said the global head of currency strategy at Brown Brothers Harriman.
Despite the strong labour market, wages continue to grow at a slower pace. Average hourly earnings for private sector workers are up 2.5 percent from this time last year but remain below analyst forecasts.
Kathy Jones, chief fixed-income strategist at the Charles Schwab investment firm, said this is because most new jobs on the market are roles that offer relatively low pay.
“If orders are strong and business is good, I think employers will have to pay more,” she said. “I don’t think they’re going to have much choice.”