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Markets Jump On Strong Jobs Numbers; Economist Says This Signals First Rate Hike In Seven Years

Jayson Derrick
  • U.S. equities jumped higher on Friday after the U.S. Bureau of Labor Statistics said the U.S. economy added 211,000 jobs in November – exceeding estimates of 200,000.
  • The U.S. unemployment rate held steady at 5 percent, a seven-year low.
  • Tara Sinclair, Chief Economist for the job site Indeed, said the jobs report signals the Fed will lift off on its first rate change in seven years.

Within an hour of the opening bell, the SPDR S&P 500 ETF Trust (NYSE: SPY) was trading higher by nearly 1 percent and the PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ: QQQ) was higher by around 1.1 percent.

Friday's job reports may prove to be the final catalyst for the Federal Reserve to announce an increase in its benchmark interest rate, at least according to Tara Sinclair, Chief Economist for the job hunting site Indeed.

"Today's jobs report signals that the Fed will lift off on its first rate change in seven years," Sinclair said in an e-mail. "All key indicators are pointing in the right direction."

Related Link: EXCLUSIVE: Mohamed El-Erian Says Fed Signals 'Greater Comfort' With Potential December Hike

Sinclair continued that it was "heartening" to see growth in construction and that manufacturing held steady. She added that these are "key industries" to pay close attention to as they are not only "bellwethers" for economic growth, but are both "sensitive" to higher interest rates. As such, there could be headwinds over the long run in terms of seeing strong economic growth in 2016.

"For that, we need to see even greater labor force participation and wage gains," Sinclair added.

Finally, the economist pointed out that her own internal data at Indeed indicates six straight months of job posting growth by employers. However, the site continues o see "relatively lackluster uptake" from prospective employers.

Looking forward to 2016, Sinclair suggested that "much of the success" of the labor market is dependent on the vacant jobs being filled.

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