US unemployment rate drops to 7%

The US unemployment rate dropped from 7.3 percent to 7 percent in November -- a five-year-low -- with 203,000 jobs added, the Labor Department said Friday. The drop was significantly larger than expected. Economists had predicted a drop to 7.2 percent. Last time the unemployment rate was 7 percent was November 2008. The good news will likely jolt Wall Street, where investors are wary positive economic news puts the U.S. Federal Reserve closer to pulling back on its $85 billion per month asset purchasing program. "This week's data ... add to the sense that the Fed will be itching to pull the trigger to take the first shot at killing off its huge $85 billion per month asset purchase program at its December meeting," Markit Economics Chief Economist Chris Williamson said. The Fed at its scheduled Dec. 17 meeting might "at least fire a warning shot that the time has come to start slowly bringing about some normalization of policy. However, the most likely outcome still looks like a deferment of any decisions until the new year," Williamson said. In the monthly report, October's jobs gain was revised lower, from 204,000 to what Williamson called "a still-buoyant 200,000." An upward revision for September offset that loss with the department adding 12,000 jobs to its September estimate, bringing the total for September from 163,000 to 175,000. The department said the civilian workforce rose in November, climbing by 455,000 after dropping by 720,000 in October. However, the number of long-term unemployed -- those out of work for 27 weeks or more -- was essentially unchanged in the month, holding at 4.1 million, which is a staggering 37.3 percent of the unemployed. The administration called on Congress to renew extended unemployment benefits to help the long-term unemployed. "Today's jobs numbers show that too many Americans who have been unemployed for 27 weeks or longer are still struggling to find jobs," said Jason Furman, chairman of the Council of Economic Advisers. The department said federal jobs continued to decline, dropping by 7,000 in November, consistent with the 92,000 federal jobs lost in the past 12 months. The gains included 35,000 new jobs in professional and business services, 31,000 in transportation and warehousing, 28,000 in healthcare, 27,000 in manufacturing and 22,000 in retail. Leisure and hospitality gained 18,000 jobs in the month, while construction added 17,000, the department said.