US unemployment falls despite expectations

The US added 146,000 jobs in November, official data shows, as the economy seemingly shrugged off storm Sandy. The unexpectedly strong performance brought the unemployment rate down to a four-year low of 7.7% of the workforce. The jobs figure was well above most analysts‘ expectations and continued a recent surge that began in July.

Stock markets gave the figures a cautiously positive response, with both the Dow Jones and S&P 500 indexes rising 0.3% at the start of trading on Wall Street.

The US Federal Reserve is due to meet next week to decide whether to expand the central bank’s policy of buying up debt from the markets in order to stimulate the recovery.

Government bonds fell slightly in value following the data release, suggesting that markets have lowered the expectations for further intervention by the Fed in light of the strong jobs growth figure. However, the Open Market Committee will also have to weigh the latest consumer confidence survey, also released on Friday, which saw a sharp fall in sentiment in early December.

The drop in confidence among ordinary Americans may reflect the impasse in Congress in negotiations to avert the “fiscal cliff” of automatic spending cuts and tax rises that kicks in on 1 January. Consumer sentiment briefly plummeted in 2011 when the US lost its top triple-A after a similar standoff over the raising of the legal cap on the US federal government‘s ability to borrow.

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Park Sae-jin swatchsjp@ajunews.com