US Unemployment Rate Drops By 8.6%

Job hirings in the United States accelerated in November, and unemployment unexpectedly plummeted to its lowest rate in nearly three years, says a CNN report.

The unemployment rate fell to 8.6%, the Labour Department reported Friday, the lowest rate since March 2009 and a huge drop from 9% just a month before.

The decline was much better than expected. Economists surveyed by CNNMoney had predicted the unemployment rate would remain unchanged.

So why did the unemployment rate fall? Two reasons: yes, more Americans got jobs, but at the same time, even more people gave up on their job searches altogether.

It might be a little too early to start celebrating though, said Paul Ballew, chief economist for Nationwide. The rate could easily tick higher again, as more people enter and leave the workforce.

“It’s always important to keep in mind, the unemployment rate can bounce around, depending on who is actively looking for jobs,” Ballew said.

And the “who” in this case is telling.

Men were mostly the ones landing jobs, as the unemployment rate for those over age 20 fell to 8.3% from 8.8% in October. The women’s unemployment rate however, experienced a much smaller dip, mostly because more women had left the labour force.

But the unemployment rate was only half the story. A separate survey compiled from businesses showed that employers added 120,000 jobs in November, marking a pick-up in hiring from October. It was slightly stronger than the 110,000 jobs economists had been expecting.