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US jobs growth continues as unemployment rate drops to 5.8%

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Written by:
10/11/2014
The US economy added 214,000 jobs last month, less than forecast by economists but widely viewed as a sign of a continuing recovery.

The number of new jobs created was less than the 235,000 estimated, but the unemployment rate dropped to 5.8 per cent, a fresh six-year low.

Payrolls in the US have grown by more than 200,000 a month in each of the last nine months as the economy continues to pick up pace.

Economists surveyed by Bloomberg expect payroll gains to average around 220,000 per month for 2014, making it the fastest pace of employment growth since 1999.

However, wage growth still remains lacklustre: the latest report showed average hourly earnings increased by just 3 cents last month; year-on-year this amounts to 2 per cent, below pre-crisis average increases.

Economists expect this factor to deter the US Federal Reserve from an earlier-than-anticipated interest rate increase, as it is a key element of the recovery story.

The consensus expectation is for the Fed to begin increasing rates in the second half of next year.

 

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