Jobless rate falls to lowest since Obama took office
US businesses cranked up hiring in January in a burst of job growth that pulled the US unemployment rate down to 8.3 percent, nearly a three-year low, official data showed Friday.
The blockbuster jobs report blew past expectations, providing a shot of good news for President Barack Obama’s reelection bid in November.
The economy added 243,000 net jobs last month, the Labor Department reported, much better than the average analyst forecast.
Businesses put 257,000 jobs on their payrolls, while government layoffs, which had limited net jobs generation over the past two years, declined.
The jobs gains were broad-based, in professional and business services, leisure and hospitality, and manufacturing sectors, while the information, finance and clothing retailer sectors shed jobs.
The surge cut the jobless rate from 8.5 percent in December, and it was the fifth straight month the rate has declined; it stood at 9.1 percent in August. January’s rate was the lowest since February 2009.
The White House said the robust numbers show the United States is climbing back from the economic meltdown that took place four years ago.
“Today’s employment report provides further evidence that the economy is continuing to heal from the worst economic downturn since the Great Depression,” said Alan Krueger, President Barack Obama’s top economic adviser.
Krueger cautioned that the monthly labor market numbers are volatile and subject to substantial revisions.
“Nevertheless, the trend in job market indicators over recent months is an encouraging sign,” he said in a statement.
Job creation in January was the strongest since April 2011, and was well up from December’s 203,000 figure.
Local and federal authorities shed 14,000 jobs, the lowest level in four months.
The average workweek in the private sector in January was unchanged from December but wages rose 0.2 percent.
“The January figures were helped by exceptionally mild winter weather, but that does not remove the shine from a very encouraging report,” said Nigel Gault at IHS Global Insight.
Analysts cautioned that January job numbers are notorious for future revisions.
However, there have been a number of positive indicators that the economy picked up steam in January, including increases in auto sales and in closely watched surveys of manufacturing and services.
The ISM services sector index released Friday showed solid growth in new orders and jobs.
Moody’s Analytics analyst Sophia Koropeckyj noted a number of challenges to the recovery, including weak fiscal conditions, an expected increase in home foreclosures, the European public debt crisis, and slowing global growth.
“However, the very strong start to the year may also indicate that the US economy is more resistant to these threats than we believe,” she said.
But Matt McDonald at Hamilton Place Strategies said the decline in the labor force participation rate, to 63.7 percent from 64 percent in December, was a worrying sign that people are still dropping out of the workforce.
“If that full participation rate is the goal, our economy is ‘missing’ 3.8 million workers,” McDonald said.