By Isaac Cohen*
The latest job creation report, issued last week by the Labor Department, has more than confirmed the statement by central bank Chairman Janet Yellen that the US economy is “performing well.” In October, the creation of 271,000 new jobs by the private sector pushed down the unemployment rate to 5 percent, while average hourly wages increased 0.4 percent, for a yearly increase of 2.5 percent, the fastest pace since 2009. Further, the robust performance was not hindered by negative factors originating abroad, such as the slowdown in China and other emerging market economies, or by the meager growth in other advanced economies. These adverse circumstances have contributed to lesser exports, also hurt by the strong dollar.
The impulse was domestic, with service sectors hiring vigorously, with an increase in retail hiring of 44,000 new jobs, while professional and business services hired 78,000 persons and health services 56,700. Also, supporting this robust performance were higher levels of consumer confidence, which according to the University of Michigan, during last year, reached levels not seen since 2004.
If the incoming data confirms the continuation of this strong performance, the anticipated interest rate liftoff will begin at the next Open Market Committee meeting, scheduled for 15-16 December.