US employers hired more workers than expected in November and the jobless rate fell to a five-year low of 7%, which could fan speculation the Federal Reserve could start reducing its bond purchases this month.
Non-farm payrolls increased by 203,000 new jobs last month, the Labor Department said today.
The unemployment rate dropped three tenths of a percentage point to its lowest level since November 2008 as some federal workers 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 180,000 last month and the unemployment rate falling to 7.2% from 7.3%.
Job gains for September and October were revised to show 8,000 more jobs created than previously reported, lending strength to the report.
Other details were also upbeat, with employment gains across the board, hourly earnings rising and the work week 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 and a half year low touched in October.
The closely watched employment report was released little more than a week before the Fed’s December 17-18 policy-setting meeting.
The stronger-than-expected reading on job growth in November could stir speculation the central bank might reduce its curren tpace of bond purchases this month, but most economists feel the Fed will want further signs of economic progress before acting.
Minutes from the Fed’s last meeting in October showed officials were preparing to scale back their monthly $ 85 billion bond-buying campaign in coming months as long as the economy continues to improve.
Other details of the report showed average hourly earnings rose by four cents. The length of the work week edged up to an average of 34.5 hours from 34.4 hours.
US consumer sentiment jumps in December
US consumer sentiment surged in December as Americans’ outlook on the economy and job prospects improved, another survey released today showed.
The Thomson Reuters/University of Michigan’s preliminary reading on the overall index on consumer sentiment jumped to 82.5 for December, up from a final reading of 75.1 in November.
This was the highest reading for the index since July, and topped analyst forecasts for a reading of 76.
“All of the improvement was among households with incomes below $ 75,000, with upper income households showing no gain from last month’s reading,” survey director Richard Curtin said.
“Nearly all of the improvement was concentrated in the economic outlook for the year ahead and in how consumers judged buying conditions,” he added.
The survey’s barometer of current economic conditions jumped to 97.9 from 88 in November, beating expectations for a reading of 90, while its gauge of consumer expectations rose to 72.7 from 66.8, above an expected 68.
The current conditions index was at its highest since July, while the consumer expectations index was at its highest since August.
The one-year inflation expectation rose to 3% from 2.9%, while the survey’s five to 10-year inflation dipped to 2.8% from 2.9%.