US unemployment fell to four-year low before Katrina

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Saturday, September 3, 2005

The United States Department of Labor announced that the country's unemployment rate fell to a four-year low of 4.9%. American employers created about 169,000 new jobs in August. However, this trend is projected to end due to Hurricane Katrina (the data was collected prior to the hurricane).

Economists expect the number of jobless to grow by more than 500,000 in September and the unemployment rate to drive up over 5% again, but they are unsure of the effect an of upcoming Federal Reserve decision on interest rates. Some sources believe the Fed will make no change, while others say the rates will likely be increased to prevent the economy from overheating, causing inflation, which also may be caused by the surge in crude oil and gasoline prices.

The markets fell despite the unemployment data. The Dow Jones industrial average fell 12.26 points to 10,447.37 while Nasdaq fell 6.83 points to 2,141.07. The US dollar declined slightly against most world currencies.