The US unemployment rate fell to 9.5 percent last month, despite the economy shedding 125,000 jobs, the US Labor Department said yesterday.
The unemployment rate was down from 9.7 percent in May, but jobs were lost for the first time this year.
Most analysts had expected the ranks of jobless Americans to have swollen beyond 15 million, pushing the unemployment rate from 9.7 percent to 9.8 percent.
The headline figure will be some succor for US President Barack Obama, who is running out of time to put the economy back on track before Congressional elections in November.
Although the White House has repeatedly warned that unemployment will remain high for the rest of the year, polls show it is still a crucial issue with voters.
However, the loss of 125,000 jobs will add to worries that the economic path ahead will be far from smooth. Still, the drop will offer a smidgen of comfort to markets, which have been convulsed by worry about a double-dip recession in recent weeks.
The last quarter has been tortuous for the top 30 US companies, with the Dow Jones Industrial Average losing more than 10 percent of its value, in large part over fears about the fate of the US economy.
One reason for continued pessimism will be the continued weakness of the private sector, which created a modest 83,000 jobs last month, although that figure was well up from May’s downwardly revised total of 33,000 jobs.
Faced with an uncertain outlook and poor access to credit, US firms have been reluctant to rehire workers.
Last month's figures also showed the evaporation of hiring for this year's Census, which accounted for about 95 percent of new jobs in May. Census hiring fell back by 225,000.
The continued weakness has sparked calls for Obama to provide more government spending to restart the recovery, but proponents of this plan admit it is nearly impossible as Washington zeroes in on elections in which the national debt is also likely to feature prominently.
Congress is currently locked in a bitter debate over extending unemployment insurance for more than 1 million workers and is likely to balk at a wider spending package.
The US House of Representatives on Thursday extended federal unemployment benefits through Nov. 30, but the Senate still has to take up the controversial measure.
Without the extension, about 1.7 million unemployed would be unable to receive their benefits after July 3, according to the House Financial Services Committee.
A new vote on the measure is not expected until Congress returns from its week-long July 4 Independence Day holiday recess.
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