The American economy added 57 000 jobs during November but that figure was far fewer than expected, adding to fears that the upturn is failing to translate into significant employment growth.
The jobless rate in the US fell from 6% to 5,9%, the lowest it has been since March. November was the fourth consecutive month of employment gains.
Economists, though, had been forecasting the creation of 150 000 jobs during the month after recent data pointed to a massive expansion in the world’s largest economy. Gross domestic product in the US grew at a rate of 8,5% during the third quarter, the biggest increase for 20 years, prompting hopes that employers might start hiring again in big numbers.
The disappointing figures sent the dollar to a new low against the euro. The single European currency was worth $1,2144, up from $1,2066. The pound also gained, up to $1,7251, from $1,7193.
To sustain the recovery, economists reckon that between 200 000 and 300 000 new jobs need to be created every month.
The disappointing numbers weighed on Wall Street. In mid-morning trade, the Dow Jones index of leading shares was 30 points lower at 9 900. ”It took everyone a little by surprise, especially after having such positive economic data leading up to it,” said Stephanie Weiss, head trader at US Bancorp Asset Management.
American states heavily reliant on manufacturing jobs are still seeing little evidence of the recovery. Industry cut another 17 000 jobs last month.
The contraction was the 39th month of job losses in the manufacturing sector and key states affected like Ohio, Pennsylvania and West Virginia could have a decisive impact on the re-election chances of George Bush. The manufacturing sector in the US has lost roughly 2,7-million jobs since the Bush administration entered the White House.
But the average working week in manufacturing grew from 40,2 hours to 40,8 hours, which suggests that activity is picking up. The commerce department also provided more encouraging news for the manufacturing sector. It said new orders to US factories had risen by 2,2% during October, the fifth increase in the past six months, and the strongest gain for 15 months.
The November employment figures were in part flattened by the impact of a strike among grocery store workers in California, which accounted for the loss of 23 000 jobs.
The labour department said the US economy had added 328 000 jobs since the beginning of August. ”It’s true we’ve had four consecutive months of payroll growth, which is a start. But it’s only a bare start,” said David Wyss, chief economist at Standard & Poor’s DRI – Guardian Unlimited Â