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The US Department of Labour announced on Friday the sharpest drop in unemployment in two-and-a-half years as 288,000 jobs were added to the economy in April.
The April data beat analysts’ forecasts by 37 per cent, bringing down the unemployment rate from 6.7 to 6.3 per cent – the lowest level since September 2008.
Two weeks ago, Federal Reserve Chair Janet Yellen said that the US labour market will reach “full employment” in two to three years, and that interest rates are likely to remain unchanged for some time.
The latest job data appears to confirm the US Federal Reserve’s assessment that the economy does not require as lofty a stimulus package as the one it launched in 2009.
On Wednesday the Fed continued its tapering initiative and shaved yet another $10 billion off its bond-buying stimulus programme.
Started in 2009 to pull the US out of recession, the stimulus package has now been reduced from $85 to $45 billion.
A Fed statement said that it found “sufficient underlying strength in the broader economy to support ongoing improvement in the labour market.”