US jobs market continues steady pick-up

US jobs market continues steady pick-up

The US jobs market showed further improvement as the unemployment rate in November fell to its lowest level since March, official figures showed today.

Although the economy added fewer jobs than expected - 57,000 instead of the 150,000 forecast - the unemployment rate dropped to 5.9% last month from 6% in October.

US payrolls in the past four months now have grown by 328,000 during the past four months, indicating that America's so-called jobless recovery is over. Last month's job numbers would have been higher had it not been for grocery store strikes in California, Missouri and elsewhere.

"America's jobless recovery phase is over," said Andrij Halushka, economist with the Centre for Economics and Business Research. "The payroll increase would have been much closer to the 100,000 figure expected by the markets if not for strike-related activity in the retail trade sector, where employment declined by 28,000 (workers on strike are not counted as employed). Today's news should increase optimism about the US economic performance this year and in 2004."

Today's figures provided yet further evidence that the US recovery is on course. The US economy expanded at an 8.2% annual rate from July to September, the fastest pace for 20 years and more than double the 3.3% rate of this year's second quarter.

Recovery has come on the back of huge tax cuts and the lowest interest rates - 1% - since 1985. The Federal Reserve is expected to keep the.....continued below

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cost of borrowing at historically low levels when it meets next week.

Until now, his Democratic rivals could accuse Mr Bush of presiding over an economy that has lost more than 2.6 million manufacturing jobs since he took office. With the job market picking up, George Bush will be increasingly hard to beat in next November's presidential election.

As in the UK, US factories have struggled particularly badly despite the recovery. In November, job losses continued for the 39th month running with payrolls falling by 17,000. But the pace has slowed significantly, amid hopes that the sector will pick up soon.

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