US employment growth exceeds forecasts

Mumbai: US employers added more jobs than forecast in November, despite a slump in the housing and manufacturing sectors, official data showed. Employment levels in the US increased by 132,000 in November against 79,000 in the previous month, which was lower than estimated, a labor department report said. The higher numbers were attributed to accelerated employment at retailers, restaurants and health-care firms, while manufacturers and construction jobs declined. US jobless rate was at 4.5 per cent against a five-year low of 4.4 per cent.

The Federal Reserve, which lifted borrowing costs for two years through June, are expected to keep its benchmark interest rate at 5.25 per cent next week. Traders are now betting on a Fed rate cut before or at the March meeting. However the probability of such a move have already fallen with futures prices on the Chicago Board of Trade. Bankers also said there is nothing in the labour department report that would make the Fed cut rates so soon. Rather, the low unemployment rate is likely to push up wage levels, they pointed out.