Unemployment Rate Drops in January
The unemployment rate in the United States fell in January to a record low in the last three years. At the same time, payrolls increased more than expected. These changes casted doubts on the Federal Reserve’s plan to keep the interest rates low until late 2014.
The jobless rate fell to 8.3 percent, which is the lowest level since February 2009. The Labor Department announced that the nation had a 243,000 increase in jobs, which is the biggest in the past nine months and has exceeded the forecast made by analysts. Service industries grow the most.
Stocks and bond yields jumped on optimism that the US economy would weather the European debt crisis as the labor market improves that led to an increase in household spending. The data showed that factories and retailers increased and this could boost President Barack Obama’s re-election bid. The announcement was made after Fed Reserve Chairman Ben S. Bernanke stated that unemployment rate’s decline would be slow.
Standard and Poor’s 500 index increased 1.5 percent to 1,344.90 at the close of the trading in New York. This is the best start to a year since 1987. The index is up 6.9 percent in 2012. The yield on the 10-year Treasury note is up to 1.92 percent from 1.82 percent.