Comment on U.S. Bureau of Labor Statistics Employment Situation Report by Gad Levanon, Director, Macroeconomic and Labor Market Research at The Conference Board

Strong job report confirms Fed's decision to raise rates

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Dec 04, 2015, 09:21 ET

NEW YORK, Dec. 4, 2015 /PRNewswire/ -- Only a terrible job report would have been enough to prevent the Fed from raising rates in 12 days. November's gain of 211,000 jobs, coupled with upward revisions to October and September, confirms the Fed's view that the labor market remains robust and that wage growth could accelerate in 2016. With such solid job growth, a second rate hike could soon follow.

As the labor markets gets tighter, the downward trend in the unemployment rate is naturally becoming more moderate, yet we still expect the rate to reach 4.5 percent a year from now. We expect wage growth to significantly accelerate in such a scenario. The trajectory for the Federal Funds rate may be less gradual than many expect.

SOURCE The Conference Board