US jobless rate drops to 8.6 per cent

 

US employment growth picked up speed in November and the jobless rate dropped to a two and a half low of 8.6 per cent, further evidence the economic recovery was gaining momentum.

Nonfarm payrolls increased 120,000 last month, the Labor Department said today, in line with economists' expectations for a gain of 122,000.

The relative strength of the report was also bolstered by revisions to the employment counts for September and October to show 72,000 more jobs created than previously reported.

While part of the decline in the unemployment rate from 9.0 percent in October was due to people leaving the labor force, the household survey from which the jobless rate is derived also showed solid gains in employment

The unemployment rate had been expected to hold at 9 percent.

"The labor market is gradually healing. It's a glacial pace, but we are taking small steps in the right direction," said Ryan Sweet, a senior economist at Moody's Analytics in West Chester, Pennsylvania. He made the comments before the release of the report.

The report is unlikely to take much pressure off President Barack Obama, whose economic stewardship will face the judgment of voters next November. The outlook for the U.S. economy is also being threatened by Europe's deepening financial crisis.

The report will not prove decisive for the U.S. Federal Reserve, which is weighing whether the recovery needs further monetary support.

Data ranging from manufacturing to retail sales suggest the growth pace could top 3 percent in the fourth quarter, in contrast to China, where growth is cooling. Growth in much of Europe has slowed down.

While the economy's growth pace appears to have accelerated from the third quarter's 2 percent annual rate, it is still insufficient to cut deeply into the high unemployment rate, and Europe's festering debt crisis poses a big threat.

At the same time, U.S. fiscal policy is set to tighten in the new year, even if lawmakers extend a payroll tax cut.

Taken together, some analysts believe the headwinds facing the U.S. economy will lead the Fed to ease monetary policy further by buying more bonds.

"We still have a very long way to go. I would favor the Fed going for a third round of quantitative easing," Sweet said. "It's the only powerful tool left, even though it's losing some of its bang."

Analysts say the economy needs to create at least 125,000 jobs every month just to keep the unemployment rate steady.

All the increase in nonfarm payrolls in November again came from the private sector, where employment rose 140,000 after increasing 117,000 in October.

Government employment fell by 20,000. Public payrolls have dropped in 10 of the past 11 months as state and local governments have tightened their belts.

Outside of government, job gains were almost across the board, with retail surging 49,800.

Elsewhere, construction payrolls fell 12,000 after losing 15,000 jobs in October. Factory jobs edged up 2,000, with most of the gains coming from automakers.

Health care and social assistance hiring rose 18,700 after adding 30,300 job in October. Temporary hiring - seen as a harbinger for future hiring - increased 22,300 after adding 15,800 jobs last month.

The average work week was unchanged at 34.3 hours, with hourly earnings falling two cents.

Reuters

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
News
people Ex-wife of John Lennon has died at her home in Spain
News
Nick Clegg on the campaign trail in Glasgow on Wednesday; he says education is his top priority
peopleNick Clegg remains optimistic despite dismal Lib Dem poll ratings
Life and Style
2 Karl Lagerfeld and Choupette
fashion
Arts and Entertainment
Buttoned up: Ryan Reynolds with Helen Mirren in ‘Woman in Gold’
filmFor every box-office smash in his Hollywood career, there's always been a misconceived let-down. Now he says it's time for a reboot
News
people
News
Actress Julianne Moore wins the Best Actress in a Leading Role Award for 'Still Alice' during the 87th Annual Academy Awards in Hollywood, California
people
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Telemarketing / Sales Co-ordinator - OTE £25,000+

£10000 - £25000 per annum: Recruitment Genius: This provider of staffing and r...

Recruitment Genius: Kitchen Porter

£19000 per annum: Recruitment Genius: One of the four inns of Court is seeking...

Recruitment Genius: Chef De Partie

£20000 - £24000 per annum: Recruitment Genius: One of the four inns of Court i...

Ashdown Group: Graduate IT Support - Surrey - £24,000

£20000 - £24000 per annum: Ashdown Group: Graduate IT Support Helpdesk / 1st L...

Day In a Page

War with Isis: Iraq declares victory in the battle for Tikrit - but militants make make ominous advances in neighbouring Syria's capital

War with Isis

Iraq declares victory in the battle for Tikrit - but militants make make ominous advances in neighbouring Syria
Scientists develop mechanical spring-loaded leg brace to improve walking

A spring in your step?

Scientists develop mechanical leg brace to help take a load off
Peter Ackroyd on Alfred Hitchcock: How London shaped the director's art and obsessions

Peter Ackroyd on Alfred Hitchcock

Ackroyd has devoted his literary career to chronicling the capital and its characters. He tells John Walsh why he chose the master of suspense as his latest subject
Ryan Reynolds interview: The actor is branching out with Nazi art-theft drama Woman in Gold

Ryan Reynolds branches out in Woman in Gold

For every box-office smash in Ryan Reynolds' Hollywood career, there's always been a misconceived let-down. It's time for a rethink and a reboot, the actor tells James Mottram
Why Robin Williams safeguarded himself against a morbid trend in advertising

Stars safeguard against morbid advertising

As film-makers and advertisers make increasing posthumous use of celebrities' images, some stars are finding new ways of ensuring that they rest in peace
The UK horticulture industry is facing a skills crisis - but Great Dixter aims to change all that

UK horticulture industry facing skills crisis

Great Dixter manor house in East Sussex is encouraging people to work in the industry by offering three scholarships a year to students, as well as generous placements
Hack Circus aims to turn the rule-abiding approach of TED talks on its head

Hack Circus: Technology, art and learning

Hack Circus aims to turn the rule-abiding approach of TED talks on its head. Rhodri Marsden meets mistress of ceremonies Leila Johnston
Sevenoaks is split over much-delayed decision on controversial grammar school annexe

Sevenoaks split over grammar school annexe

If Weald of Kent Grammar School is given the go-ahead for an annexe in leafy Sevenoaks, it will be the first selective state school to open in 50 years
10 best compact cameras

A look through the lens: 10 best compact cameras

If your smartphone won’t quite cut it, it’s time to invest in a new portable gadget
Paul Scholes column: Ross Barkley played well against Italy but he must build on that. His time to step up and seize that England No 10 shirt is now

Paul Scholes column

Ross Barkley played well against Italy but he must build on that. His time to step up and seize that England No 10 shirt is now
Why Michael Carrick is still proving an enigma for England

Why Carrick is still proving an enigma for England

Manchester United's talented midfielder has played international football for almost 14 years yet, frustratingly, has won only 32 caps, says Sam Wallace
Tracey Neville: The netball coach who is just as busy as her brothers, Gary and Phil

Tracey Neville is just as busy as her brothers, Gary and Phil

The former player on how she is finding time to coach both Manchester Thunder in the Superleague and England in this year's World Cup
General Election 2015: The masterminds behind the scenes

The masterminds behind the election

How do you get your party leader to embrace a message and then stick to it? By employing these people
Machine Gun America: The amusement park where teenagers go to shoot a huge range of automatic weapons

Machine Gun America

The amusement park where teenagers go to shoot a huge range of automatic weapons
The ethics of pet food: Why are we are so selective in how we show animals our love?

The ethics of pet food

Why are we are so selective in how we show animals our love?