Strong US jobs report points to Fed rate hike
WASHINGTON: Strong hiring across the US economy in November lent fresh support on Friday to the Federal Reserve embarking on a long-awaited series of interest rate hikes later this month.
Analysts said it was near certain that the Fed, after keeping policy on hold for months awaiting more evidence of economic strength, would undertake its first rate increase in more than nine years at its upcoming meeting.
While the strong November employment data hid some signs of naggingly persistent slack in the market, Fed Chair Janet Yellen made clear this week she believes that will slowly dry up as the economy continues to grow, and was no barrier to a rate increase.
“The November jobs report was the last hurdle for a December Fed rate hike,” said Nariman Behravesh, chief economist at IHS Global Insight in a note. With the new data, “a rate hike at the December 15-16 Fed meeting is (almost) a sure thing.”
“The Fed will raise rates in December and data are now being watched primarily to determine how quickly rates rise next year and beyond,” echoed Chris Low, economist at FTN Financial.