Jobless dip boosts recovery hopes

The US unemployment rate fell to a two-and-a-half-year low of 8.6 per cent in November and companies stepped up hiring in further evidence that the US economic recovery is gaining momentum.

Non-farm payrolls increased 120,000 last month, the US Labor Department said yesterday, in line with economists' expectations for a gain of 122,000. The relative strength of the report was also bolstered by revisions to the employment counts for September and October to show 72,000 more jobs were created than previously had been reported.

While part of the decline in the unemployment rate from 9.0 per cent in October was due to people leaving the labour force, the household survey from which the jobless rate is derived showed solid gains in employment.

The jobless rate had been expected to stay at 9 per cent. It last fell by 0.4 percentage point in January.

"The really good news is that employment has grown for four months running – in large steps. There was a solid increase in private employment. Everything there looks steady, but clearly healthy and positive," Pierre Ellis, a senior economist at Decision Economics, said.

The retail sector accounted for more than a third of all new private sector jobs in November.

Data ranging from manufacturing to retail sales suggest that growth could succeed in topping 3 per cent in the fourth quarter of the year.