Unemployment in the US fell to 7% in November, its lowest level in five years , as employers took on 203,000 new people.
The figures from the Bureau of Labor Statistics may have been bolstered by the return of hundreds of thousands of federal employees following October’s government shutdown but they still represent the fourth straight month of good growth in the jobs market. November’s gain followed a 200,000 gain in October, revised down from an initial estimate of 204,000.
The latest number was far higher than the 180,000 gain economists polled by Dow Jones Newswires had expected. Jobs growth has averaged 193,00 a month over the last three months.
Incoming Fed chair Janet Yellen has been a staunch defender of QE while some, including other Fed members, have worried it could cause asset bubbles.
Last month at her confirmation hearing Yellen signalled she intends to keep up QE until the jobs market is more stable. The Fed began its latest round of asset purchases in September 2012. Since then the unemployment rate has fallen from 8.1% to 7.0%. Over that same period, 2.8m jobs have been created at an average of 188,000 per month.
The report also comes as Congress appears close to a solution to its ongoing budget crisis and avoid a second government shutdown. While issues remain – particularly over an extension to jobless benefits – lawmakers appear hopeful of reaching a deal next week that would end a budget crisis that has been going on since 2009.
Jason Furman, chairman of the White House’s council of economic advisers, said: “Today’s report was yet another reminder of the resilience of America’s private sector following the disruptive government shutdown and debt limit brinksmanship in the first half of October.”
“Nevertheless, today’s jobs numbers show that too many Americans who have been unemployed for 27 weeks or longer are still struggling to find jobs. That is why the president is calling on Congress to pass the extension of emergency unemployment insurance before it expires at the end of the year, just like they have always done when long-term unemployment remains elevated.”
Republican House speaker John Boehner said: “Today’s report includes positive signs that should discourage calls for more emergency government ‘stimulus.’ Instead, what our economy needs is more pro-growth solutions that get government out of the way.”
The jobs report comes on the heels of the release of the latest US gross domestic product (GDP) figures. The Commerce Department said Thursday that the US economy grew at a 3.6% annual rate from July through September, the strongest rate of growth since the first quarter of 2012.
On Wednesday, ADP, the payroll processor, said the US had added 215,000 new jobs in November – its strongest report this year.
But while the jobs report was stronger than expected, problems remain. The unemployment rate for African Americans is 12.5%, more than twice the 6.2% rate for white Americans. For Hispanics the rate is 8.7%.
The number of long-term unemployed – those jobless for 27 weeks or more – was essentially unchanged at 4.1 million in November. These individuals accounted for 37.3% of the unemployed. The number of long-term unemployed has declined by 718,000 over the past 12 months.