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Last Updated: Friday, 5 December, 2003, 19:13 GMT
US jobs growth remains sluggish
Job seekers
The job market is slowly improving
The US economy added a lower than expected 57,000 new jobs during November, official figures have shown.

Analysts had been hoping for a higher figure after recent data indicated the economy was gaining strength.

The US unemployment rate fell to 5.9% last month - the lowest rate for eight months - from 6% in October.

The weak jobs figure helped the euro to reach another all-time high against the dollar of $1.2169, before the currency fell back to $1.2166.

It was the sixth straight trading session in a row that the euro has posted a record high.

"The dollar is ending the week on a weak note due to weak data," said David Mann, currency strategist at Standard Chartered.

"Sentiment is very strongly anti-dollar," he added.

The jobs news also hit stocks on Wall Street and the benchmark Dow Jones index closed down 0.7% at 9,862.68.

'Jobless recovery' returns?

November's jobs rise was lower than the increase seen in October, which was revised upwards to 137,000.

The latest figures suggest that, despite a recent surge in growth, the US economy is still struggling to create jobs.

It highlights the predicament of the economic recovery in this phase - very strong GDP growth, not much employment growth
Anthony Karydakis, Banc One Capital Markets
The latest estimate of gross domestic product (GDP), released last month, showed growth in the three months to September hit an annualised rate of 8.2% - the fastest rate for nearly two decades.

And October's jobs growth figure had raised hopes that the so-called "jobless recovery" was a myth.

"It drives the point home that the strong economic growth we're seeing is not accompanied by any respectable employment growth," said Anthony Karydakis, senior financial economist at Banc One Capital Markets.

"It highlights the predicament of the economic recovery in this phase - very strong GDP growth, not much employment growth."

The Labor Department figures showed most of the gains to the non-farm payrolls figure came from the service sector.

But the manufacturing sector continued to shed jobs, losing 17,000 posts during the month.

Boost for Main Street

Analysts said the disappointing figures meant the Federal Reserve was unlikely to change its stance on keeping rates low.

"The implication is that the Fed is indeed going to be very patient before they consider tightening," said Mr Karydakis.

However, some observers said the latest set of payroll figures did contain some positive signs.

"Four straight months of payroll growth - even if it's moderate growth - is nothing to sneeze at," said Ian Morris, chief US economist at HSBA Securities in New York.

"The unemployment rate fell to 5.9% and that's a positive for your average guy. That might be a psychological boost for Main Street."

Manufacturing boost

Despite more gloomy jobs news from the manufacturing sector, a separate set of figures provided signs of optimism.

The Commerce Department said new orders for US manufactured goods grew by 2.2% in October, the fastest rate for more than a year.

The rise was also the fifth increase in the last six months.

A big increase in civilian aircraft orders helped to lift demand for transportation equipment by 5.5%.

When the transport element was stripped out of the overall figure, factory orders grew by 1.6%.

"This is yet another indicator of improving conditions in manufacturing," said Patrick Fearon, an economist at AG Edwards & Sons.




WATCH AND LISTEN
The BBC's Evan Davis
"It is odd, because the American economy is growing really fast"



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