US unemployment dips to 5 per cent as hiring surges

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The US unemployment rate edged down one tenth of a percentage point to 5 per cent in October, the lowest since April 2008, according to a government survey of households issued Friday.

In a separate survey of employers, US payrolls grew by 271,000 last month, reversing two months of slow hiring and topping the 12-month average of 230,000.

The employment report follows last week’s decision by the rate-setting Federal Reserve not to tighten monetary policy, in the face of continued weak inflation and the hiring slowdown of August and September.

The stronger jobs picture could spur the central bank at its next scheduled meeting on December 16 to order the long-awaited hike in interest rates from the unprecedented near-zero range in place for seven years.

After payroll gains averaged 142,000 in August and September, October hiring far exceeded Wall Street expectations.

A Bloomberg Business survey of 75 economists produced a median forecast of 185,000 in payroll expansion, with the highest prediction at 250,000.

The Bureau of Labour Statistics’ November employment report is due December 4.

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