US Jobless Rate Falls to Lowest Level in Nearly 7 Years

The U.S. economy is showing more signs of improvement, with the unemployment rate creeping down to 5.5 percent in February, its lowest rate since May 2008. Friday’s report from the Labor Department showed the economy had inched down from the January rate of 5.7 percent, with a net gain of 295,000 jobs. That surpassed the expectations of economists polled by Reuters news agency, who’d predicted a bump to 5.6, with a net gain of 240,000 jobs. It also may encourage the Federal Reserve to start raising interest rates. Employers were hiring at restaurants and bars, business services, construction, health care and transportation, buoyed by an increase in consumer spending. The Fed reported earlier this week that home and car sales increased in most areas over the last quarter, among other positive signs. However, the jobless-rate decline primarily came from people leaving the labor force, Reuters said. Average hourly earnings rose by three cents, the labor report said. The labor report had more encouraging news. While 2.7 million jobseekers have been out of work for at least 27 weeks – accounting for almost a third of the unemployed – their numbers declined by 1.1 million from a year ago. The generally improving economic scenario could lead the Federal Reserve to raise interest rates in June, Reuters reported. That step would counter the risk of the market overheating, because higher rates increase borrowing costs. Some material for this report came from Reuters



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