US unemployment rate falls to 9.7%

The Labor Department has today revealed that the US unemployment rate fell from 10% in December to 9.7% in January – its lowest level in five months.

According to the Labor Department, employers cut 20,000 jobs last month – many analysts had predicted the economy to add jobs.

US President Barack Obama has pledged to make job creation his top priority.

Meanwhile, the positive figures come just a week after the Commerce Department revealed that the US economy grew 5.7% in the final three months of 2009 – the fastest pace in six years and higher than analysts expectations.

The US economy emerged from recession in the third quarter after experiencing growth of 2.2% and both sets of figures clearly show that after enduring the longest and deepest downturn since the Great Depression of the 1930s, the economy is recovering well.

Returning to today’s figures, last month’s job losses were the fewest since the onset of the recession and the 20,000 total compares with a staggering 779,000 losses for January 2009 and 150,000 jobs lost in December 2009.

Shares across the world fell earlier today prior to the release of the US jobs data and fears over soaring debt in European countries.

Earlier today, Japan’s Nikkei fell almost 300 points to 10,057.1 – its lowest level in two months. Hong Kong‘s Hang Seng Index lost 592.31 points to 19,749.33 in morning trading today – the first time in five months that it has dropped below the crucial 20,000 level.

Yesterday, key European markets saw falls of over 2%. Portugal’s stock markets lost almost 5% – the largest single day fall since November 2008 due to a slump in demand for Government bonds in the country.

Meanwhile, there have been concerns over the recovery of the euro zone and in particular Greece’s deteriorating fiscal situation.

Greece, which is the euro zone’s weakest economy, has the highest debt of the 16-member bloc. Currently, its public debt stands at €300 billion (£268 billion).

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