MercoPress. South Atlantic News Agency

US unemployment falls to 5.9%, the lowest since July 2008

US markets cheered the news, with the Dow Jones Industrial Average rising over 100 points.

The US unemployment rate dipped to 5.9% in September, a six-year low, official figure has shown. The rate fell from 6.1% in August and is the lowest recorded since July 2008. US Labor Department also said that employers added 248,000 jobs last month, and the job growth figures for August and July were revised upwards.

 The jobs figures are seen as a significant gauge of the health of the economy and there has been much debate over when US interest rates will rise. The US Federal Reserve has kept interest rates close to zero since the financial crisis in 2008.

US markets cheered the news, with the Dow Jones Industrial Average rising over 100 points. The US dollar was pushed higher as expectations rose that interest rates would go up sooner than previously predicted.

The most important item in the report is the drop in the unemployment rate below 6%, since Federal Reserve Chairwoman Janet Yellen has said there is only so much slack “if the unemployment rate falls below 6%”.

The Federal Reserve's stimulus program, known as “quantitative easing”, is due to end this month. Its aim was to keep long-term interest rates low using the purchase of bonds, and thus to boost spending.

The Federal Reserve has indicated it will raise short term interest rates if the economy continues to grow. Janet Yellen has given no firm date for the rise, but the Fed has said the move will come a “considerable time” after the stimulus program ends.

The Labor Department said 69,000 more jobs were created in July and August than previously estimated. It also said nearly 100,000 jobseekers stopped looking for work in September.

The largest rise in employment was in professional and business services, including management and legal services, which saw an increase of 81,000 jobs in September. The retail sector added 35,000 jobs compared with the previous month. Employment in the health care, construction and leisure and hospitality sectors also continued to increase.