Good Jobs Numbers Won’t Stand in Way of Rate Hike
- Dec 04, 2015
The U.S. economy created a net of 211,000 new jobs in November, according to the Bureau of Labor Statistics on Friday. That might not count as a roaring rate of growth (the upper 200,000s or more would), but it certainly isn’t bad, and it’s enough growth not to interfere with any plans the Federal Reserve might have—and the hints are very strong indeed—that interest rates will tick upward from their long-standing, historically low levels later this month. The headline unemployment rate, which is determined by the BLS in a separate survey, didn’t move, coming in at 5 percent, the lowest it’s been since well before the recession.
Besides the report’s effect on the mindset of monetary policymakers, it also seems to be another decent set of numbers for the real estate industry. November’s hiring rate is roughly in line with the average monthly gain of 237,000 over the prior 12 months—a steady rate overall that encourages various kinds of space absorption—and there was job growth in construction, which points to developers responding to demand for new space. Altogether, employment in construction rose by 46,000 positions in November, with much of the increase in residential specialty trade contractors (up 26,000). Over the past year, construction employment has grown by a net of 259,000 jobs.
The creation of jobs was also up in professional and technical services, and health care, which tend to reflect a demand for office space and medical office space, respectively. Professional and technical services added 28,000 jobs in November; over the last 12 months, the sector has added 298,000. Employment in restaurants and bars continued to trend up in November, with an addition of 32,000 (and 374,000 over the year), and retailers hired a net of 31,000 people, which—as a seasonally adjusted number—is about in line with growth in that industry over the last year, which totaled a net of 284,000 positions.
By contrast, employment in “mining” declined over the month by 11,000 according to the BLS, which isn’t a surprise, considering that includes oil and gas extraction. That industry has been shedding jobs for about a year now, a trend that might have an impact on certain urban office markets, such as Houston and Tulsa, as well as a broader impact on rural parts of the Dakotas (whose unemployment rates, however, are still fairly low, possibly because would-be energy workers aren’t flooding into the area any more). For the reason of the country, lower energy prices are a good thing, taking some pressure off of business costs, and allowing consumers to have more money to spend on other things.