US jobless rate falls to nine-year low

WASHINGTON: The US unemployment rate fell to a nineyear low of 4.6 per cent in November, as employers added another 178,000 jobs, making it almost certain that the Federal Reserve will raise interest rates later this month.

The unemployment rate hit its lowest level since August 2007 because more people found work but also because the labor force shrank as more people retired, lowering the number of workingage people in the labour force to 62.7 per cent.

US nonfarm payrolls increased by 178,000 jobs last month after increasing by 142,000 in October, the Labor Department said on Friday. Economists had forecast payrolls rising by 175,000 last month and the unemployment rate remaining unchanged at 4.9 per cent.

“The decline in the unemployment rate and the unambiguous decrease in labor market slack are likely to place further upward pressure on inflation. This report easily clears the bar for a December rate hike,” said Michael Gapen, chief economist at Barclays in New York.

Wages slipped for the first time in nearly a year though after two straight months of increases. Economists partially blamed the drop in average hourly earnings on a calendar quirk, which they expect Fed officials will overlook at their Dec. 13-14 policy meeting.

Average hourly earnings fell three cents, or 0.1 per cent, after rising 0.4 per cent in October and gaining 0.3 per cent in September. Average hourly earnings fell for workers in mining, manufacturing and utilities in November.

Last month’s drop in wages lowered the year-on-year gain to 2.5 per cent in November from October’s 2.8 per cent increase, which was the largest rise in nearly 7-1/2 years.