U.S. unemployment rate plummets to 9 percent

U.S. unemployment rate plummets to 9 percent

About 500,000 jobs were created and the unemployment rate fell to 9 percent in January, the lowest since April 2009, the latest labor report revealed. In a span of just two months, joblessness fell from 9.8 to 9.0 percent in what is a promising sign for the recovering U.S. economy.

But most hiring were not done by big firms, a government survey showed. Instead, small businesses created the majority of new jobs along with self-employment.

Other encouraging signs are the expansion of the manufacturing and service sectors as well as the strongest retail sales in five years.

While the 9 percent unemployment rate is still fairly high, the steep falling trend could boost business expansion and consumer spending, which spurs more jobs creation.

Analysts see a brighter future in the job market with some saying that joblessness can drop under 9 percent by the end of the year. Yet some also say joblessness can also spike again temporarily as those who gave up looking for jobs may be encouraged by new business hiring. The unemployment rate does not count jobless people who were not actively looking for work at the time of the survey.

Payrolls registered a net gain of 36,000 jobs in January, still not enough to keep up with population expansion. It needs to rise more than four times that amount.

The employment figures should have been more upbeat analysts say. But bad weather during last month may have stifled some hiring especially in the transportation and construction sectors.

The fastest decline in the unemployment rate since 1958, along with other positive signs, indicate that that the worst of the Great Recession is finally over.

Posted by James Fried on Saturday February 05 2011, 3:33 AM EST. Ref: AP. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0