Job gains put US on pace for best year since ’99

Associated Press

WASHINGTON

The resurgence in U.S. hiring accelerated in November and put 2014 on track to be the healthiest year for job growth since 1999.

The gain of a robust 321,000 jobs — the most in nearly three years — put further distance between a strengthening American economy and struggling nations throughout the developed world. The job market isn’t yet fully healthy. But its steady improvement raises the likelihood that the Federal Reserve will start raising interest rates from record lows by mid-2015.

The unemployment rate remained at a six-year low of 5.8 percent, the Labor Department said Friday.

“These were boomlike numbers,” said Mark Zandi, chief economist at Moody’s Analytics. “They indicate that the U.S. economy is on very solid ground.”

Friday’s report also raised hopes that Americans’ pay might finally be starting to increase after barely budging since the Great Recession began seven years ago. The average hourly wage rose 9 cents to $24.66, the biggest gain in 17 months.

Fed Chair Janet Yellen has cited stagnant wages as a key reason to keep rates low. Higher wages could lead to higher prices, and the Fed might feel compelled to raise rates to limit inflation.

Still, over the past 12 months, hourly pay has risen just 2.1 percent, barely above the 1.7 percent inflation rate. And other economists pointed out that inflation remains below the Fed’s 2 percent target and likely will remain tame because of lower energy prices. That might give the Fed some leeway to wait.

The Fed has kept its benchmark rate near zero for six years to encourage more borrowing and spending.

Investors welcomed Friday’s news: The Dow Jones industrial average jumped 58 points to close at 17,958. Earlier in the day, it was within 9 points of crossing the 18,000 mark for the first time. The yield on the 10-year Treasury note rose to 2.31 percent, from 2.25 percent, a sign that investors expect a healthier economy to push up interest rates.