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Last Updated: Friday, 7 May, 2004, 13:22 GMT 14:22 UK
Further boost for US jobs market
George W Bush
The jobs figures are a welcome boost for George W Bush
US employers created 288,000 new jobs in April, as the rate of unemployment in the United States fell to 5.6%, according to the Labor Department.

It is the latest sign that the US recovery is gathering pace and will be a boost for President George W Bush ahead of the election in autumn.

The 288,000 figure is far higher than the 165,000 predicted by analysts.

But the strong job figures could bring forward the prospect of higher US interest rates, analysts noted.

Inflationary pressures

The Labor Department figures also showed that March's number of new jobs was revised upwards to 337,000, the highest since October 1990.

"They're very strong numbers again," said Gary Thayer, chief economist at AG Edwards & Sons in St Louis.

"Not only did payrolls rise more than expected, they revised up the March numbers and the unemployment rate came down, so it looks like the labour market is doing much better now that the economy is growing at an above-average pace."

Mr Thayer added that the figures raised the prospect of higher US rates.

"I'm not sure the Fed is going to move at the June meeting, but I think they're very likely to raise rates at least by the August meeting," he said.

Some 867,000 new jobs have now been created in the US so far this year.

Factory output

The additions to the payroll in April were led by the service sector, with professional and business services employment rising by 123,000.

The manufacturing sector added only 21,000 new positions, but this was the third month in succession that the nation's previously struggling factories have added jobs.

The unemployment rate, which is measured in a separate study than that of job creation, dipped to 5.6% in April from March's figure of 5.7%.

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