8 Jan 2011

US unemployment rate falls, but job creation slow

3:30 pm on 8 January 2011

The United States unemployment rate dropped to 9.4% in December, from 9.8% the month before.

The biggest one-month fall since April 1998 and was due to both an increase in employment and a sharp decline in the labour force as many gave up searching for work.

Employers hired fewer workers than expected, however.

The US Labor Department survey showed non-farm payrolls increased 103,000, below economists' expectations for December of 175,000.

Private hiring rose 113,000 while government employment fell 10,000.

President Barack Obama said the jobs report showed a clear trend towards economic growth.

Federal Reserve Chairman Ben Bernanke said in his latest public remarks that there was increased evidence a self-sustaining recovery in consumer and business spending may be taking hold.

But he told the Senate Budget Committee that if the economy continued to create jobs at its current rate there would be no sustained fall in the unemployment rate.

Wall Street fell after the release of the jobs figures. The Dow Jones industrial average dropped 22.55 points (0.2%) to close at 11,674.76.