US jobless rate falls to 7 percent as job creation exceeds forecast
US employers added 203,000 nonfarm payrolls in November, according to official data from the Labor Department. A median estimate of economists surveyed by Bloomberg called for a gain of 180,000.
The jobless rate fell from 7.3 percent to 7 percent, a five-year low, as employers continued on-boarding at a steady pace. November was the second consecutive month US employers added more than 200,000 payrolls, the strongest back-to-back gain since February-March. Job creation has averaged 195,000 per month over the past 12 months; in November, job gains were concentrated in transportation and warehousing, healthcare and manufacturing.
Labour force participation—the percentage of the working-age cohort employed or actively searching for work—increased slightly to 63 percent. Long-term unemployment (those without a job for 27 weeks or more) was unchanged at 4.1 million; the number of persons unemployed for less than five weeks fell by 300,000, as furloughed government workers returned to work.
The jobless rate edged closer to the Federal Reserve’s threshold of 6.5 percent, refueling speculation about the pace and timing of a bond taper. The Fed has been purchasing US Treasuries and mortgage-backed securities at a pace of $85 billion a month since September 2012. The timetable for a stimulus cut was pushed back after economic progress slowed in the second half of the year.
“It appears that the market is getting increasingly comfortable with a taper scenario that parallels an incrementally stronger economy,” said Jim Russell of US Bank Wealth Management.
Fed Bank of Atlanta President Dennis Lockhart said a repeat performance of the October jobs report could boost his confidence in an bond taper.
“December is certainly a meeting where the issue can be addressed,” said Lockhart, “but I want to be quite confident” recovery is on the right track before the Fed begins to scale back record stimulus.
The Federal Open Market Committee’s final meeting of the year is scheduled to take place December 17-8.
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