US jobless rate falls to lowest in nine years

Fed likely to hike interest rate as data shows halving of jobless rate from recession's 10%

WASHINGTON • The US unemployment rate in November fell to its lowest level since August 2007 as the economy continued to pump out new jobs, all but guaranteeing an interest rate hike this month.

Official figures released yesterday by the Labour Department show the jobless rate fell 0.3 point to 4.6 per cent, with a solid 178,000 new positions created.

For all the arguments about the health of the economy during the presidential race, this latest snapshot of American workers does not radically shift the outlook one way or the other.

"It's kind of more of the same," said Mr Jim O'Sullivan, chief US economist at High Frequency Economics, referring to the labour market's performance over the past year. "There's been strong growth in employment."

Considering this year's job gains, he noted that the "bar isn't very high" for the central bank to follow through with a rate increase.

While Mr Donald Trump won the presidential race last month with promises to create more jobs, it is too soon for any election results to have affected the overall employment picture. The Labour Department surveyed employers just a few days after the vote took place.

"It doesn't have anything to do with the election," said Mr Gus Faucher, the deputy chief economist at PNC Financial Services.

The task of slicing the jobless rate in half from its recession high of 10 per cent has taken seven years. "This is not something that happens overnight," said Mr Jonas Prising, chairman and chief executive of ManpowerGroup, one of the largest recruiters worldwide.

According to several key measures, President Barack Obama is handing over an unusually strong economy to a successor from the opposing party. There have been 81 consecutive months of private sector job growth, the longest streak on record.

The tightening labour market, after a frustrating delay, has started to bump wages above the rate of inflation. The US economy grew by a healthy 3.2 per cent annual rate during the third quarter of this year.

Such progress led members of the Federal Reserve to conclude at last month's meeting that the case for an increase in the benchmark rate had been "strengthened".

Yet for all the statistical improvements, tens of millions of workers continue to feel that the recovery has passed them by. Those without skills are relegated to low-paying jobs without steady schedules, security and benefits. Breadwinners who once had well-paid jobs in manufacturing are unwilling to settle for minimum-wage service jobs.

AGENCE FRANCE-PRESSE, NYTIMES

A version of this article appeared in the print edition of The Straits Times on December 03, 2016, with the headline 'US jobless rate falls to lowest in nine years'. Print Edition | Subscribe