Newspaper article The Christian Science Monitor

Unemployment Rate Falls. Job Gains Ease Fears of New Recession

Newspaper article The Christian Science Monitor

Unemployment Rate Falls. Job Gains Ease Fears of New Recession

Article excerpt

The unemployment rate fell to 8.6 percent last month, down from 9 percent. It's the latest sign that the US economy is steering clear of a new recession. Still, pitfalls linger.

The US economy gained jobs and saw its unemployment rate fall in November, and those signals came on top of other recent signs suggesting that the nation is steering clear of a new recession.

Employers who report their payrolls to the government added 120,000 jobs for the month, with a gain of 140,000 in the private sector and a decline of 20,000 in government.

The unemployment rate fell to 8.6 percent, down from 9 percent in the Labor Department's October survey. Solid job gains, coupled with the less-inspiring trend of people dropping out of the work force, were key reasons the jobless rate improved.

Overall, the signs of healing in the labor market are an encouraging indicator at a time when economists see some significant risk that the economy could sink back into recession.

The risk hasn't receded entirely. A debt crisis in Europe has been weighing on US financial markets, creating a backdrop of uncertainty about possible contagion in the global banking sector. And some forecasters worry that, after the season of holiday spending passes, US consumer spending could falter early in the new year.

But for all the lingering worries, the good news for now is that the economy is marching forward on a path of at least modest growth.

"The US economy continues to show improvement even as the picture for the rest of the world deteriorates," Nigel Gault, an economist at the forecasting firm IHS Global Insight, said Friday in a written analysis. "The better domestic data," he said, means the risk of a US recession is now about 35 percent, down from a prior estimate of 40 percent. "That [danger] is still elevated because of the problems in the Eurozone." Mr. Gault, based in Lexington, Mass., says the US economy should grow at an annualized pace of about 2.6 percent in the fourth quarter, but that the momentum may slacken to growth of about 1. …

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