US jobless rate falls to five-year low in November
- 6 December 2013
- From the section Business
The US unemployment rate fell to a five-year low of 7% in November, according to the US Labor Department.
Payroll figures also showed that 203,000 jobs were created last month, more than predicted, as the US economy displayed encouraging signs of strength.
US markets cheered the news, with the Dow Jones Industrial Average spiking nearly 200 points.
The monthly non-farm payroll figure is watched closely by economists.
Analysts say these indications of strong growth could mean that the Federal Reserve will start to unwind its massive stimulus programme soon.
Outgoing chairman Ben Bernanke has previously said that when the unemployment rate dropped below 7%, the US central bank would end the $85bn-a-month bond buying programme known as quantitative easing.
"When asset purchases ultimately come to an end, the unemployment rate would likely be in the vicinity of 7 percent, with solid economic growth supporting further job gains," he said in June press conference, before later scaling back his firm target.
However, the November figure might have been distorted. Some federal workers who were counted as jobless in the October - because of the 16-day partial government shutdown - returned to their jobs last month.
The latest data also showed that the October and September non-farm payroll figures, which had also been strong, were even better than their first estimates.
Job gains for those two months were revised upwards by 8,000.
Chris Williamson, chief economist at research firm Markit, said the data indicated the US labour market was "buoyant".
"The decline pushes the jobless rate down to its lowest since November 2008 and closer towards the Fed's threshold of 6.5%, which it wants to see breached before it considers tightening policy via higher interest rates," he said.
But he added that a decision on when the Fed might start to taper its stimulus programme was still not clear cut.
"The economic data have not been a one-way street, with numbers such as factory orders and business investment disappointing. There are signs that the pace of economic growth has begun to wane at least in part because business and households have become concerned about further fiscal fighting in Washington."
The labour market figures follow news earlier this week that economic growth, as measured by GDP, in the third quarter of the year was revised up to an annual pace of 3.6% from a previous estimate of 2.8%.
Also on Friday, the US Commerce Department said that consumer spending increased in October, though wages and salaries were barely changed.
Consumer spending rose by 0.3%, compared with a 0.2% rise in September. The Commerce Department said that there had been an increase in purchases of manufactured goods such as cars, as well as higher spending on clothing, rent and utilities.
However, wages and salaries in the US increased by just 0.1% in October, following a 1% rise the month before.