WASHINGTON: US employers hired more workers than expected in November and the jobless rate fell to a five-year low of 7 percent, heightening expectations the Federal Reserve will soon start ratcheting back its bond-buying stimulus.
Nonfarm payrolls increased by 203,000 new jobs last month, the Labour Department said. The unemployment rate dropped three tenths of a percentage point to its lowest level since November 2008 as some federal employees who were counted as jobless in October returned to work after a 16-day partial shutdown of the government.
Economists polled by Reuters had forecast payrolls rising only 180,000 last month and the unemployment rate falling to 7.2 percent from 7.3 percent. Job gains for September and October were revised to show 8,000 more jobs created than previously reported, lending more strength to the report.
Other details were also upbeat, with employment gains across the board, average hourly earnings rising and the workweek lengthening.
In addition, the jobless rate fell even as the participation rate — the share of working-age Americans who either have a job or are looking for one — bounced back from a 35-1/2-year low touched in October.
“The US labour market is still far from healed, but it certainly is moving in the right direction,” said Eric Stein, co-director of the Global Income Group at Eaton Vance Investment Managers in Boston.
Economic data so far for the fourth quarter have been mixed, with labour market and consumer spending indicators firming. However, the housing market and business spending have slowed.
A separate report from the Commerce Department showed consumer prices were steady in October, after having risen by 0.1 percent for three straight months. Over the past 12 months, prices rose 0.7 percent, the smallest gain since October 2009. Excluding food and energy, prices were up just 0.1 percent for a fourth straight month. These so-called core prices were up only 1.1 percent from a year ago.
Both inflation measures remained well below the Fed’s 2 percent target, and some economists said they provided another reason for the central bank to move cautiously in pulling back its stimulus.
Reuters
