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Monday 07th of February 2011
February 4, 2011    

US unemployment rate drops to 9%

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by Kay Murchie

The Labor Department has revealed the unemployment rate in the US has fallen from 9.4% in December to 9% in January - confounding expectations of a rise to 9.5%.

It also follows on from the sharp drop of 9.8% reported for the month of November.

However, the large fall has been attributed to jobseekers giving up looking for work, so they ceased to be classified as unemployed.

Meanwhile, job creation within the world’s largest economy stood at 36,000 - far below expectations of 140,000.

The majority of the new jobs created came in manufacturing, while the retail sector added a 28,000, and healthcare 11,000.

In other news, last week, the Commerce Department revealed US economic growth for the fourth quarter expanded by an annualised 3.2% – boosted by consumer spending.

However, the rate of growth was slightly lower than the 3.7% expected by analysts but follows growth of 2.6% in the third quarter.

Meanwhile, the world’s largest economy grew by 2.9% in the whole of 2010 – the strongest year of growth since 2005.

The improved unemployment figures and the pick up in consumer spending suggest a sustainable recovery is underway. Consumer spending accounts for approximately two-thirds of economic output in the US.

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