U.S. job losses slowed sharply in November and the unemployment rate unexpectedly declined, in a sign the labor market is finally starting to heal as the economy recovers.

Nonfarm payrolls fell by just 11,000 last month, slowing down from a downwardly revised 111,000 drop seen in October, as the recovery encouraged companies to retain workers, the Labor Department said Friday.

It was the best showing since December 2007, when payrolls rose by 120,000, said a Labor department official. Economists surveyed by Dow Jones Newswires had expected a payroll decrease of 125,000.

The unemployment rate, calculated using a survey of households as opposed to companies, edged lower to 10% in November from 10.2%. Economists had forecast the jobless rate would remain at October’s level of 10.2%, when it rose to the highest level since April 1983.

Employment fell in construction, manufacturing and information, while temporary help services and health care added jobs.

Despite the better-than-expected report, the jobs market has still some way to recover. Since the start of the recession in December 2007, the number of unemployed has increased by almost eight million.

The November jobs report should maintain the Federal Reserve’s view that interest rates must remain at a record low to bolster a soft recovery. The central bank’s rate-setting committee left interest rates close to zero a month ago in the face of low inflation and still-high unemployment.

(Source: Wall Street Journal)