Unemployment dips to 7 percent

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The U.S. economy created 203,000 jobs in November as the unemployment rate fell to a 5-year low of 7 percent, the U.S. Bureau of Labor Statistics said today.

Employment rose in transportation and warehousing, health care and manufacturing. Additionally, some federal workers who had been counted as jobless in October returned to work after the partial federal government shutdown. The number of unemployed people fell to 10.9 million from 11.3 million in September.

Reuters reported this morning that the stronger-than-expected reading on job growth could stir speculation that the Federal Reserve might reduce its current pace of bond purchases this month, but most economists think the Fed will want further signs of economic progress before acting.

Reuters also said job gains the government reported for September and October were revised to show 8,000 more jobs created than previously reported, lending strength to the employment report. Other details were also upbeat, with employment gains across the board, higher hourly earnings and a longer workweek.

"The U.S. labor market is still far from healed, but it certainly is moving in the right direction. This number puts a December taper on the table, but it isn't a certainty," Eric Stein, portfolio manager at Eaton Vance Investment Managers in Boston, told the news service.

Reuters said the jobless rate fell even as the participation rate — the share of working-age Americans who either have a job or are looking for one — bounced back from a 35-1/2-year low in October.

The government said the number of long-term unemployed people — those jobless for 27 weeks or more — was essentially unchanged, at 4.1 million, in November. They accounted for 37.3 percent of the unemployed. The number of long-term unemployed has declined by 718,000 during the last 12 months, the government said.

The number of people employed part time for economic reasons fell by 331,000, to 7.7 million, in November. They were working part time because their hours had been cut or because they were unable to find a full-time job.

In November, 2.1 million people were marginally attached to the labor force, down by 409,000 from a year earlier. They were not in the labor force, but they wanted and were available for work and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the four weeks preceding the survey.

The government said job growth has averaged 195,000 a month during the last 12 months.

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