The US unemployment rate has dipped to its lowest point in five years. Employers in the US hired more people in November than anticipated. This brought the number of out of work job seekers down to seven percent from 7.3 percent in October. The US Labor Department reports that 203,000 jobs were added last month.
These numbers, released Friday, exceeded economists’ expectations. As Wall Street Journal reports, experts predicted the US unemployment rate to sink to 7.2 percent in November. Revised numbers from September and October led the Labor Department to report 8,000 previously uncounted jobs. The numbers suggest that the US economy could be well on its way to a steady recovery.
Experts say the increasing number of hires show that confidence is being restored among employers. The hope among analysts is that this means more money will be in the hands of consumers — who will, especially during the holiday season, be likely to use their paychecks to boost businesses in the US.
Eyes are now on the Federal Reserve who may scale back bond purchasing earlier than expected. With the US unemployment rate dropping off faster than forecast, debate will begin over cutting back on the economic stimulus, reports ABC News. Ratcheting down the Federal Reserve’s stimulus could happen later this month, when its members will meet.
The Fed’s bond buying stimulus began in September 2012. Since then, US unemployment has sunk nearly one percent. Chairman Ben Bernanke has said the stimulus would likely get cut after unemployment hits seven percent. However, in September, Bernanke said that the unemployment rate is not the only factor that will be considered. He emphasized that the Fed will first have to look over other numbers before committing to scaling back the economic stimulus.
The Department of Labor’s November report shows other hopeful numbers, too. As ABC News reports, many of the jobs added by US employers last month were in high-paying areas like manufacturing and construction. Employers also increased their workers’ hourly wages, on average, by four cents while giving them longer work hours, a rise from 34.4 hours per week to 34.5 hours.
As the US unemployment rate drops faster than expected, many analysts believe these are signs that the economy is getting back on track.