U.S. job growth strongest in 3 years
321,000 jobs added in November, though many positions are low-paid and seasonal
The U.S. added 321,000 jobs in November, the biggest burst of hiring in nearly three years.
In addition, the government said Friday that 44,000 more jobs were added in September and October combined than it had previously estimated. Job gains have averaged 241,000 a month this year, making 2014 the strongest year for hiring since 1999.
The jobs figures are the latest evidence that the U.S. is in economic rebound. U.S. GDP expanded at a 3.5 per cent annual pace in the third quarter, after growing at 4.1 per cent in the second quarter.
The U.S. unemployment rate remained at a six-year low of 5.8 per cent.
But there are still millions of Americans who have stopped looking for work or are slow to return to the labour force, a legacy of five years of a stagnant economy.
"At this rate, we won't return to pre-recession labour market health until October 2016 -- nearly nine years since the recession began," said Elise Gould, a senior economist at the liberal Economic Policy Institute.
Wage growth slow
And wage growth over the last 12 months in the U.S. was just 2.1 per cent, barely above the 1.7 per cent inflation rate.
That has kept a lid on consumer spending, which has the potential to be a big driver of U.S. growth.
New jobs still tend to be in low-paying or temporary positions in retail and shipping which could affect the long-term health of the economy. Companies such as UPS and Amazon announced big hiring plans for seasonal workers for a period of six weeks this year in anticipation of holiday online spending.
Manufacturers added 28,000 jobs, the most in a year, and education and health services 38,000. Professional and business services, a category that includes fields such as accounting and engineering, added the most jobs in four years.
However, every sign of a strengthening economy makes it likelier that the Federal Reserve could raise interest rates in mid- 2015. The Fed ended its quantitative easing program this fall, but has said it will be a “considerable period” before it raises rates.
Shrugging off rest of world
Much may depend on the economy’s performance in the first quarter of 2015. In 2014, a bitter winter led to a sharp slowdown in the first quarter.
"The good U.S. data keeps on rolling in, suggesting the American economy is gaining momentum and shrugging off the weakness in the rest of the world," TD economist Craig Alexander said in a note to clients.
He points out that the 321,000 jobs outstripped expectations of about 230,000 jobs.
With oil prices falling and wages move up, this sets the stage for more strength in 2015.
"The bottom line is that the American economy appears to be moving into a goldilocks position. Just as the labor market is hitting a higher trend line and wages are moving up, the stronger U.S. dollar and weakening commodity prices are sending a disinflationary impulse through consumer prices," he said.
With files from the Associated Press