WASHINGTON, Dec 2: The US economy generated 215,000 jobs in November, the Labour Department said on Friday, in further evidence of the recovery from devastation of hurricanes Katrina and Rita.
The unemployment rate held steady at 5.0 percent, the report said.
The job growth figure was slightly ahead of the 210,000 expected by private economists.
Strong gains came after tepid job growth in October of 44,000 jobs — a figure revised downward from the initial estimate of 56,000.
In September, the gain was just 17,000 jobs as employment was hit by Hurricane Katrina.
The report showed the best job growth since July and put the labour market on a more normal growth track after the destruction and disruptions from the hurricanes.
The report was “strong, but pretty much as expected,” said Gregor Bush, economist at BMO Financial.
This shows a return to the pre-hurricane trend. The economy has shrugged off the impact of Katrina and is creating jobs at a solid pace again, added Joel Naroff at Naroff Economic Advisors.
The economy is moving forward and the days of driving growth through layoffs and strict adherence to productivity enhancements is behind us. The big future issue could be labour shortages as the unemployment rate is likely to start falling again and it is already at a relatively low level. For the Fed, this is just another argument for raising rates.
But Robert Brusca at FAO Economics said the report was weaker than it appeared, because it represents a recovery from two weak months.
The report is not strong, Brusca said. The drop in hours worked makes it weak as fewer hours were worked overall by all workers in the months. The job gains in the month also reflect workers coming back after hurricane displacement — that is not part of the economic trend.
The report showed total hours worked in the economy fell 0.1 per cent in November. The average workweek fell by a tenth of an hour to 33.7 hours.
Average hourly earnings increased by three cents, or 0.2 per cent, to $16.32.
Average earnings have risen 3.2 per cent over the past year, the biggest jump since March 2003.
Wage growth is a chief concern of the Federal Reserve, which fears that wage pressures could embed an inflationary psychology in the economy. Average wages are still rising slower than inflation, however.
The Fed is expected to raise interest rates for a 13th consecutive meeting on December 13.
The storms still have a large impact on employment. Of 900,000 adults who were evacuated from their homes in August, half had returned to their homes by mid-November. The unemployment rate for those who still have not returned home was 27.8 per cent, with many others dropping out of the labour force.
The aftermath of the storms is likely adding to construction employment, which rose by 37,000 in November.
Factory employment rose by 11,000 in November, but the average workweek in manufacturing dropped to 40.8 hours from 41 hours.—AFP
