"The November employment release paves the way for Fed action in December. Nonfarm payrolls rose by 211,000 with net upward revisions of 35,000 (October's already outsized gain was revised up from 271,000 to 298,000). The average payroll gain since June has been 206,000. As Yellen said yesterday, "close to the monthly pace of around 210,000 in the first half of the year and still sufficient to be consistent with continued improvement in the labor market" ‐‐ the criteria for tightening in December.
The unemployment rate held steady at 5.0% (on an unrounded basis, it was 5.046% in November versus 5.036% in October). Both employment and the labor force climbed equally sharply for a second straight month. In November, the labor force increased by 273,000 on top of a 313,000 increase in October. Meanwhile, household employment rose by 244,000 after increasing in October by 320,000. Even the labor force participation rate joined the party this month, edging higher from 62.4% to 62.5%.
On the wage front, hourly earnings were up 0.2% (as expected) and 2.3% on a year/year basis. Note: a 0.1% increase in December (our early forecast) will lift the year/year rate to 2.7% next month).
Overall, the November employment report was solid, which should help to allay some growing concern over the US economy (following pullbacks in the ISM manufacturing and non-manufacturing indices -- the latter to still a very healthy level)."
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