Drop in US unemployment brings cheer to Obama
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The US unemployment rate surprisingly dropped to 8.6 per cent in November, the lowest in two-and-a-half years, bringing good cheer to embattled President Barack Obama, but analysts wondered if it would prove to be a game changer.
The big dip in unemployment from 9 percent in October occurred even though the Labour Department reported Friday that just 120,000 jobs were added in November, a figure roughly in line with expectations.
Unemployment now stands at its lowest level since March 2009, a clear political plus for Obama but something of a mixed bag considering 13.3 million Americans are still jobless and the sovereign debt crisis unfolding in Europe could tip the world into a recession, Politico news site focusing on presidential politics said.
"Today's employment report provides further evidence that the economy is continuing to heal from the worst economic downturn since the Great Depression, but the pace of improvement is still not fast enough," said Alan Krueger, chairman of the president's Council of Economic Advisers.
"While the US economy is healing, the world economy continues to be in a fragile state, and all economies are linked through trade and finance."
Noting that the unemployment rate in November dropped faster than it has in more than 11 years, Time magazine called it "Amazing News" but wondered "Is It a Game Changer?"
The "question remains: Is the economy stuck in a slow growth mode, or is it about to take off?" the US news magazine said noting "Economists generally believe the economy has to add about 200,000 jobs a month for the unemployment rate to consistently drop."
One of the problems of the recovery was that fewer people have been starting up new businesses, it said. But banks have recently begun lending more, making it easier for more people to start new businesses.
"That's not just good news for the unemployed, but for the long-term health of the economy in general," Time said.
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