Business

Barack Obama hails 'clear' trend of lower unemployment

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Media caption"Our mission has to be to accelerate hiring, and accelerate growth," says Barack Obama

President Obama has cautiously hailed a "clear" trend of job growth, and called on businesses to boost investment.

His remarks at a window manufacturer came as the US unemployment rate dropped 0.4 points to 9.4% in December, the largest one-month drop since 1998.

Some 103,000 jobs were created last month, the Labor Department said, although this was fewer than forecast.

But Federal Reserve Chairman Ben Bernanke warned employment could remain depressed for four to five more years.

The lower unemployment rate, while cheering, came not only because more people found jobs, but also because 260,000 had given up looking and ceased being counted as unemployed.

'Invest now'

Touring an energy-efficient window manufacturer in Maryland, Mr Obama said the jobs report showed a clear trend towards economic growth.

He predicted a package of tax cuts forged with Republicans last month would continue to boost hiring, and urged businesses who were thinking about creating jobs to press ahead.

"If you are planning on making investments in the future, make them now and that will help us grow the economy," he said.

"We want businesses to grow, we want this economy to grow and we want to put people back to work."

At the US Senate, meanwhile, Federal Reserve chairman Ben Bernanke warned the job market might not return to normal levels for another four or five years.

He said the economy had entered a "self-sustaining recovery" powered by growing consumer spending and robust business investment.

But, he added a warning: "Notwithstanding these hopeful signs... [with] employers reportedly still reluctant to add to payrolls, considerable time likely will be required before the unemployment rate has returned to a more normal level.

"Persistently high unemployment, by damping household income and confidence, could threaten the strength and sustainability of the recovery."

According to official Department of Labor figures, seasonally adjusted non-farm payroll employment increased by 103,000, with the number of unemployed people dropping by 556,000 to 14.5 million.

Overall employment for October and November was revised to show 70,000 more job gains than earlier reported, and the unemployment rate is now at its lowest since May 2009.

Private hiring increased in December by 113,000, while government employment fell by 10,000.

Employment rose by 47,000 in the leisure and hospitality sector and by 36,000 in healthcare, but was little changed in other major industries, the Labor Department said.

Federal Reserve Governor Elizabeth Duke also sounded a cautiously upbeat note in remarks on Friday.

"Overall, the recovery in economic activity to date has been uneven and has not been sufficient to reduce unemployment noticeably," she said.

"But I am encouraged by signs that the recovery may have gained traction recently."

Labor Secretary Hilda Solis told the BBC she hoped jobless Americans who had stopped looking for work - thereby driving down the unemployment rate - would return to the labour market.

"We need to keep people energised," she said.

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