The US unemployment rate unexpectedly fell to 5.7 percent last month, the lowest since March, and companies added workers to their payrolls for a fourth straight month, signs the worst round of firings may be over.
The unemployment rate fell from 5.9 percent in July and payrolls increased by 39,000 last month as more jobs were added in health care, construction and help-supply, the Labor Department said. In July, employment grew a revised 67,000, about 10 times more than the government estimated last month.
"It seems as if the economy is plugging along," said Geoffrey Somes, an economist at Fleet Bank in Boston. Income growth"is making consumers comfortable enough to continue spending."
Surging consumer demand for cars and housing may help the economy grow twice as fast this quarter as in the previous three months. Companies are retaining employees or slowly adding to the workforce, boosting income growth.
US Treasury securities fell and stock index futures rose after the report showed employment and income gains will help sustain the economic recovery. Economists had expected payrolls to rise by 30,000 last month following a previously reported increase of 6,000 for July, according to the median of forecasts by 60 economists in a Bloomberg News survey. The unemployment rate was expected to rise to 6 percent.
The US economy grew at a 1.1 percent annual rate from April to June, down from 5 percent in the first three months of the year, when most economists say the recovery began.
Growth is likely to accelerate to 2.6 percent this quarter and 3 percent in the last three months of the year, according to the latest consensus estimate from the Blue Chip Economic Indicators.
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