U.S. unemployment rate falls to five-year low

PanARMENIAN.Net - The U.S. unemployment rate fell to a five-year low of 6.7% in December as firms created 74,000 new jobs, latest figures show, according to BBC News.

The number of jobs created was the lowest for three years and was well under half the number expected by analysts.

The U.S. had bad weather in December, which may have stalled hiring plans.

The fall in the rate, the lowest since October 2008, in part reflects people leaving the labor force. The government counts people as unemployed only if they say are actively searching for work.

Leisure, manufacturing and services added jobs, but construction cut 16,000 jobs, the biggest drop in the industry in 20 months.

In the four months before December, the average hiring rate was 214,000 jobs a month.

Other figures on employment have suggested a healthy jobs market, and the Labor Department said 38,000 more jobs in November were created than the 203,000 previously reported.

Overall, the U.S. economy is picking up steam, with recent figures for consumer spending, trade and factory output all strong.

This year, economists expect the U.S. to grow by 3%, well up on the 1.7% last year.

The improving picture led the U.S. central bank, the Federal Reserve, to start to taper its massive monetary stimulus program from $85bn a month to $75bn.

If the Fed remains confident about the direction of the economy, it may trim this back further at its next meeting at the end of this month.

Chris Williamson, the chief economist at Markit, said: "A steep fall in unemployment in December ups the odds of further Fed tapering.

"Although non-farm payroll growth was disappointingly low, one month of weakness doesn't represent a trend and, with other economic indicators showing robust growth toward the end of last year, talk will intensify about when interest rates should start rising if we see a resumption of robust employment growth in January."