The most recent figures released by the US Department of Labor show that the percentage of Americans unemployed and claiming benefits is at its lowest level for six years. The US economy added a further 248000 jobs during the month of September and job creation data for August and July was revised upwards (by 69000), based on harder numbers.

The upshot of all this is that unemployment has dipped from 6.1 to 5.9% (the figures only reflect those actively seeking work and claiming unemployment benefits – 100000 people ceased to claim and therefore be counted last month). The figure is the best seen in the US economy since before the full might of the Global Financial Crisis struck – way back in July 2008. US unemployment is edging down towards its long term average of 5.83%, suggesting that the economic cycle is tending towards a normal, post-recession level.

Better data from US unemployment figures is naturally fuelling the debate as to when the Federal Reserve will raise interest rates above their close-to-zero position. A precursor to this was that unemployment would need to below the 6% mark, but this seems to have been lost in the sands of time. Speculation that US interest rates will rise and the ending of the Federal Bank’s asset purchase programme have been fuelling the recent Bull Run of the Dollar. The asset purchase reduction, or Taper, is set to come to an end in October.

The employment figures provided a fillip to the Dow Jones Industrial Average which put on 100 points on the strength of the news.

Traditionally, interest rate policy is used either to stimulate, or choke off the money supply either to stave off inflation (by hiking rates) or increasing the supply of “cheap” money (to improve liquidity). Whilst inflation is not a problem, it could be argued that the hangover from the Global Financial Crisis is that central banks (well with one or two notable exceptions) have lost control of the levers that can move the economy. To allow the central banks more room for manoeuver in a future difficulty, it is probably necessary to move interest rates back into a more usual range.