DATA SNAP: Jan US Jobs Growth Was Biggest Since Nov 2000
07 Feb 08:30
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January Employment Report !Surprise: Yes !
Jan Dec !Trend:Sluggish!
Payrolls +143K -156K !Recovery !
Unemployment Rate 5.7% 6.0% !Consensus: !
Hourly Earnings $14.98 $14.98 !Payrolls +60K !
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By Joseph Rebello and Phil McCarty
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--The U.S. unemployment rate fell to a three-month low
last month as employers added more workers to their payrolls than at any time
in the last two years, suggesting the labor market may be stabilizing.
Non-farm payrolls increased by a larger-than-expected 143,000 in January,
partly reversing a decline of 156,000 in December, the Labor Department said
Friday. That marked the biggest job gain since November 2000, and the first
since October. The unemployment rate fell three tenths of a percentage point to
5.7%.
The numbers surprised Wall Street: A consensus forecast of economists
surveyed by Dow Jones Newswires and CNBC had called for an increase of 60,000
in payrolls and a 6% unemployment rate. The Labor Department said the job gain
mostly reflected seasonal shifts in the retail-trade industry, which added
101,000 jobs.
Amid sluggish economic growth and worries about the consequences of a U.S.
war with Iraq, employers have cut more than 2 million jobs over the last two
years. Forecasters widely expect economic growth to remain sluggish this year,
and they had been expecting the unemployment rate to rise as high as 6.5% by
the middle of 2003.
To ensure faster growth, President George W. Bush last month unveiled a $674
billion economic-stimulus package his administration estimates will create 1.5
million jobs and expand the gross domestic product by nearly 2% in 2004. But
the Federal Reserve has shown no inclination to give the economy more
stimulus: the central bank decided last week to hold its key interest rate at a
42-year low of 1.25%.
The Labor Department said two-thirds of the job growth last month was
attributable to seasonal fluctuations in the retail trade industry. The
construction industry added 21,000 jobs, up from a 3,000 gain in December.
Ther services-producing industry, which includes retail trade, added 143,000
jobs.
But the manufacturing industry continued to lose jobs. The Labor Department
said it shed 16,000 jobs in January after a 80,000 decline in December. The
government added 4,000 jobs.
The employment report also validated the Fed's view that inflation risks
remain tame. Average hourly earnings were unchanged at $14.98 in January after
a 0.3% increase in December. Wage growth has slowed in year-on-year terms as
well: the increase in January was 2.7%, down from 3% in December.
But the average work week increased slightly: In January, the week lasted
34.2 hours, up six minutes from December.
The government revised its estimate of payrolls growth in December. Payrolls
declined by 156,000 that month, up from the initial estimate of a 101,000
decrease.
-By Joseph Rebello and Phil McCarty; 202-862-9279; joseph.rebello@dowjones.com
(END) Dow Jones Newswires
02-07-03 0830ET |
