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US unemployment rate falls to 6.1 per cent
July 3, 2014, 3:02 pm

The US economy beat forecasts and added 288,000 jobs in June [AP]

The US economy beat forecasts and added 288,000 jobs in June [AP]


The US Department of Labor on Thursday said that the job market added 288,000 jobs in June, beating expert forecasts by nearly 33 per cent.

The higher-than-expected new jobs have also contributed to driving the unemployment rate down from 6.3 to 6.1 per cent.

This is the fifth consecutive month that the US economy has added at least 200,000 jobs indicating that markets have strongly rebounded from what some have termed a “winter chill” – lower-than-normal temperatures which battered growth.

A Thomson Reuters/University of Michigan report shows that the between December and February there was a drop in its consumer confidence index to 79.9 from 81.6.

In December and January, spending fell by 0.3 per cent 0.6 per cent, respectively, and the Commerce Department in May said that the US economy shrank at an annual rate of 1 per cent in the first quarter.

However, the latest Labor Department also show that the construction industry hired the greatest number of workers since 2006.

Analysts predict that the Federal Reserve may revise its latest June economic policies.

Although it sees evidence that the US economy pulled out of an economic slowdown nicknamed “the winter chill”, the Fed in June acknowledged that recovery from recession created by a financial crisis since 2008 is slow.

While Fed chief Janet Yellen said that GDP growth declined in the first quarter of this year, she said that “economic activity is rebounding in the current quarter and will continue to expand at a moderate pace thereafter”.

The Fed also announced in June that it will continue tapering its monthly bond buy-back programme (known as quantitative easing – QE) by another $10 billion bringing the fund total to just $35 billion.

The QE is expected to be fully tapered by the end of this year.

Market analysts are wondering if the Fed will continue to keep interest rates at near zero levels now that the US economy appears to be picking up pace.

Source: Agencies

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