US non-farm payrolls increase by 178,000 in November

Employment conditions in the States continued to improve at a steady clip in November, although upwards wage pressures were more restrained than in the previous month.

US non-farm payrolls increased by 178,000 in November, just a tad shy of the 180,000-person rise which economists had penciled in.

Revisions to the readings for the prior two months subtracted just 2,000 jobs.

However, average hourly earnings dipped 0.1% month-on-month, dragging the year-on-year rate to 2.5% from 2.8% in the month before.

Analysts had forecast earnings would rise by 0.2% on the month and 2.8% on the year.

In parallel, the unemployment rate fell by three tenths of a percentage point to 4.6%, undershooting the 4.9% forecast from analysts by a wide margin.

That came about as the number of unemployed shrank by 387,000 to reach 7.4m and the labour force participation rate slipped from 62.8% to 62.7%.

The length of the average work-week was unchanged at 34.4 hours.

As of 1347 GMT the yield on the benchmark 10-year US Treasury note was off by three basis points to 2.41%.

"The decline in the unemployment rate and the drop in participation will likely give those members of the FOMC looking to generate a “high pressure” economy pause. Even with a relatively flat Phillips curve, the decline in the unemployment rate and the unambiguous decrease in labor market slack is likely to place further upward pressure on inflation.

"Overall and in our view, this report easily clears the bar for a December rate hike and represents some of the continued progress towards the dual mandate that the committee desires. Of course, the committee could decide that the tightening of financial conditions since September are sufficiently large to forestall a hike but we consider that to be very unlikely at this point," Michael Gapen and Rob Martin at Barclays said in a research note sent to clients.