US jobless rate at five-year low

The jobs market is showing strength

The US economy added 92,000 jobs last month, taking the jobless rate to its lowest level in more than five years.

Labor Department figures for October showed that 4.4% of the US workforce were unemployed, as against 4.6% in the previous month.

The number of new jobs created fell short of predictions by analysts, who had forecast an increase of 125,000.

However, it is the third month in a row that the politically-sensitive unemployment rate has shown a decrease.

'Attention grabbing'

The figures also showed that many more jobs were created in the previous two months than was originally estimated.

August's figure was raised by 52,000 to 230,000 while September's was increased by 87,000 to 148,000.

The unemployment headline may weigh into the election... it could be seen as a bullish sign for Republicans and the market Joe Saluzzi, Themis Trading

Recent economic data have pointed to a rapidly slowing economy, with productivity showing no growth last month and third-quarter economic growth falling to its lowest level in three years.

This had led some economists to forecast a cut in interest rates - which have been kept on hold at 5.25% for three months - early in 2007.

But the latest figures make this scenario less likely.

"The drop in the unemployment rate will get a lot of people's attention," said Patrick Fearon, a fixed income strategist at Morgan Stanley, said.

"People think the Federal Reserve might not begin to cut rates as soon as people were starting to think."

The revised job totals in August and September could also be politically significant, coming less than a week before mid-term elections in which the Republicans' handling of the economy will be a key issue.

"The unemployment headline may weigh into the election," said Joe Saluzzi, from investment house Themis Trading.

"It could be seen as a bullish sign for Republicans and the market."