US jobless total at six-month low

UNEMPLOYMENT in the United States dipped in November to its lowest level for six months, further encouraging speculation that economic recovery may at last be under way after months of false starts and disappointment.

After reporting earlier this week a further fall in weekly jobless benefit claims, the Labor Department announced that the unemployment rate fell to 7.2 per cent in November, down from 7.4 per cent in October and substantially less than the June peak of 7.8 per cent.

Most encouragingly, the report attributed the improvement to the creation of 105,000 new jobs in the non-farm sector. But this was partly due to temporary hiring by the government around election day on 3 November.

Economists have long argued that the recovery from a recession that took hold in mid-1990 would become meaningful only when improvements in other economic indicators, including output growth, began to translate in reductions in unemployment queues.

Last week, the government issued revised gross domestic product growth figures for the third quarter that showed a dramatically improved rate of 3.9 per cent.

It seems unlikely, however, that the improvement, which startled most analysts, will be sustained in the fourth quarter.

The 7.2 per cent unemployment level is the lowest since last April, when the same figure was recorded.

However, some experts warn that the level could climb again as the improved outlook attracts some unemployed back to the market who in recent months may have been too discouraged even to look for work.

At his much-heralded economic summit in Little Rock on 14 December, Bill Clinton, the president-elect, may come under pressure from some participants to go easy on plans to boost the economy with a programme of fiscal stimulus, on the grounds that recovery seems now to be coming anyway.

There remain fears that Mr Clinton may unnecessarily provoke inflation by moving too boldly.