US unemployment drop boosts Obama's re-election hopes
US President Barack Obama's hopes of a winning a second term this year gained a major boost yesterday as upbeat jobs figures revealed the biggest fall in unemployment for nearly three years.
The closely watched non-farm payroll figures showed US employers adding 200,000 jobs in December as the world's biggest economy began to pick up much-needed momentum.
The unemployment rate – stuck above 9 per cent for most of last year – unexpectedly tumbled to 8.5 per cent, the lowest since February 2009.
The figures bolster Obama's hopes of election victory when the US goes to the polls in November, although he still has some way to go as no sitting President has ever been re-elected with an unemployment rate above 8 per cent.
ING Bank's Rob Carnell said: "These are helpful developments in the US labour market, and help to confirm what has clearly been a pick-up in the pace of US activity in the last quarter or so."
The encouraging data offered some relief after survey evidence of faltering business confidence in China and fresh signs of recession in the eurozone. The pound hit a 16-month high of 1.2137 against the euro after a seventh month in a row of rising unemployment among the 17 members of the single currency unit, and a sharper than expected 0.8 per cent fall in retail sales during November.