US unemployment falls but growth worries remain

The US unemployment rate fell in November as 120,000 people found work during the month, but commentators warn this may not protect the country’s nascent recovery.

According to the US Bureau of Labor Statistics, the unemployment rate dropped from 9% in October to 8.6% by the end of last month.

Employment rose in the retail trade, leisure and hospitality, professional and business services, and healthcare sectors, the Employment Situation report shows. Employment in the government sector continued to trend down.

There are currently some 13.3m unemployed people in the US, the bureau adds. The unemployment rate is now at its lowest since March 2009.

Kathy Bostjancic, director of macroeconomic analysis at research group The Conference Board, comments: “Overall, the continued modest employment gains reflect an economy that plods along at an uninspiring pace.

“These modest job gains are still not enough to propel economic growth to a sustainable 2% growth path.”

US economic data has broadly improved over recent months, in contrast to the steady deterioration witnessed in Europe.

Julian Chillingworth, chief investment officer at Rathbone Unit Trust Management, says: “The US is holding up well. The recovery is in situ there. Obviously you have a stronger domestic economy there than you have in Europe.

“But they are not immune. If the European economic situation worsens, then the US is going to suffer.”

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