Unemployment in the United States has fallen to its lowest level in nearly four years, data showed on Friday, emphasising the underlying strength of its economy.
In spite of a smaller-than-expected rise in employment outside the agricultural sector, the jobless rate fell to 5%, a rate half that of the eurozone and one not seen since September 2001, the month of the attacks on the World Trade Centre. The new rate is fractionally higher than Britain’s unemployment rate.
Non-farm payrolls, one of the world’s key economic indicators, showed jobs growth of 147 000 last month. That was smaller than financial markets had expected, but the previous two months’ number was revised up by 44 000.
The unemployment rate fell because only 1 000 joined the workforce, which includes those looking for work as well as those with a job.
”Looking beyond the volatility of the monthly payroll employment numbers, the trends in the US labour market are consistent with an economy that is growing at a rate of 3,5%,” said Nariman Behravesh, chief economist at consultancy Global Insight.
”The data, along with other indicators published in the last two months, support the Fed’s view (and Global Insight’s) that the US recovery is settling down into a period of close-to-trend growth.”
The US central bank, the Federal Reserve, last week raised interest rates to 3,25%, continuing its policy of gradually tightening monetary policy to prevent robust growth stoking inflation. Many analysts expect rates in the US to rise to 4% by the end of the year.
The main black spot in Friday’s data was a 24 000 drop in factory employment last month, with the bulk of the new jobs, 150 000, coming in the services sector. As in Britain, manufacturing employment has been steadily falling in the US as jobs move to countries such as China. — Guardian Unlimited Â