8 Aug 2009

United States jobless rate eases to 9.4%

9:49 am on 8 August 2009

The US unemployment rate fell in July for the first time in 15 months as employers cut far fewer jobs than expected.

US employers shed 247,000 jobs in July, the Labor Department said on Friday, the least in any month since last August, taking the unemployment rate down to 9.4% from June's 9.5%.

Analysts had expected nonfarm payrolls to fall by 320,000 in July and the jobless rate to hit 9.6%.

US stocks rallied on the data as investors took the view that the recession was ending. The dollar surged, while government bond prices tumbled.

The easing in the unemployment rate could have been the result of the labor force shrinking by 422,000 in July, far more than the 155,000 decline in June, suggesting some jobless workers may have given up looking for work.

In the United States, for the purpose of calculating the unemployment rate, the labor force is defined as those with a job plus those out of a job but actively looking for work.

Recent data ranging from home sales to manufacturing have pointed to an economy starting to dig itself out of one of the worst recessions since the Great Depression of the 1930s.

However, the White House said it still expected the unemployment rate to hit 10%.