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December 5, 2009

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Surprise fall in US jobless rate

The United States jobless rate unexpectedly fell to 10 percent in November as employers cut the smallest number of jobs since the recession began.

The better-than-expected job figures are a rare note of encouraging news for the labor market. Still, the respite may be temporary. Many economists expect the jobless rate to climb into next year as the economy struggles to generate enough jobs for the 15.4 million people out of work.

The US economy shed 11,000 jobs last month, an improvement from October's revised total of 111,000, the Labor Department said yesterday. That's much better than the 130,000 Wall Street economists expected.

The unemployment rate fell to 10 percent from 10.2 percent in October, where economists expected it to stay.

If part-time workers who want full time jobs and laid off workers who have given up looking for work are included, the so-called underemployment rate also fell, to 17.2 percent from 17.5 percent in October.

There was other positive news in the report. The average work week rose to 33.2 hours, from a record low of 33 hours. Economists expect employers will increase hours for their current workers before hiring new ones. And 159,000 fewer jobs were lost in September and October than first reported.

"Strong, strong, strong," said Carl Riccadonna, a senior US economist at Deutsche Bank. "We've still got a long way to go, but the good news in this report provides important positive momentum."

The increase in hours worked also means employees are earning more income, Riccadonna said, which could help boost consumer spending and enable Americans to pay down more debt.

Average weekly earnings rose US$4.08 to US$622.17, the report said.

Temporary help services added 52,000 jobs, the fourth straight rise. That's also positive news, as firms are likely to hire temporary workers before adding permanent ones. Total employment usually starts to rise between three and six months after temporary work, Riccadonna said.


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