News / Economy

US Employment Report Points to Steady Growth

Construction worker Miguel Fonseca carries lumber as he works on a house frame for a new home, Chula Vista, Calif., Nov. 16, 2012.
Construction worker Miguel Fonseca carries lumber as he works on a house frame for a new home, Chula Vista, Calif., Nov. 16, 2012.
Reuters
U.S. employment grew modestly in January and gains in the prior two months were bigger than initially reported, supporting views the economy's sluggish recovery was on track despite a surprise contraction in output in the final three months of 2012.
 
Employers added 157,000 jobs to their payrolls last month, the Labor Department said on Friday. There were 127,000 more jobs created in November and December than previously reported. The unemployment rate, however, edged up 0.1 percentage point to 7.9 percent.
 
The closely watched report also showed an increase in hourly earnings and solid gains in construction and retail employment.
 
"This is actually a really good number when you take into account the net upward revision," said Terry Sheehan, an economic analyst at Stone & McCarthy Research Associates in Princeton, New Jersey.
 
Stock index futures added to gains on the report, while prices for U.S. Treasury debt traded slightly higher and the dollar extended losses against the euro. Coming on the heels of data on Wednesday showing a surprise contraction in gross domestic product in the fourth quarter, that should ease any worries the economy was at risk of recession, even though the unemployment rate ticked up.
 
GDP contracted at a 0.1 percent annual rate in the fourth quarter, largely because of a sharp slowdown in the pace of inventory accumulation and a plunge in defense spending.
 
A monster storm that hit the East Coast in late October also weighed on output, a drag that should lift this quarter.
 
Federal Reserve officials said on Wednesday that economic activity had "paused," but they signaled optimism the recovery would regain speed with continued monetary policy support. The Fed left in place a monthly $85 billion bond-buying stimulus plan.
 
"This shows that underneath the surface, the fourth-quarter economy was really pretty good despite all the defense cuts," said Jack Ablin, chief investment officer at BMO Private Bank in Chicago. "I think the private sector is leading the way."
 
Economists polled by Reuters had expected employers to add 160,000 jobs and the unemployment rate to hold steady at 7.8 percent last month.
 
The Labor Department also published benchmark revisions to payrolls data going back to 2008. It said the employment level in March 2012 was 422,000 higher on a seasonally adjusted basis than previously reported. It also introduced new population factors for its survey of households from which the unemployment rate is calculated. This had a negligible effect on the major household survey measures.
 
Modest Jobs Growth
 
Job growth in 2012 averaged 181,000 a month, but not enough to significantly reduce unemployment and prompt the Fed to the pull back on its bond-buying program. Economists say employment gains in excess of 250,000 a month over a sustained period are needed.
 
Though the unemployment rate dropped from a peak of 10 percent in October 2009, that was mostly because some unemployed Americans gave up the search for work because of weak job prospects.
 
The share of the working age population with a job has been below 60 percent for almost four years.
 
All the job gains in January were in the private sector, where hiring was as broad-based as it was in December and declines in public sector employment remained moderate. Steady job gains could help the economy weather the headwinds of higher taxes and government spending cuts. A payroll tax cut expired on Jan. 1 and big automatic spending cuts are set to take hold in March unless Congress acts.
 
The goods-producing sector showed a third month of solid gains, with manufacturing employment advancing for a fourth straight month. Construction payrolls increased 28,000, adding to December's healthy 30,000 gain. Construction jobs are expected to rise further as the housing market recovery gains momentum.
 
Housing is expected to support the economy this year, taking over the baton from manufacturing.
 
Within the vast private services sector, retail jobs increased by a solid 32,600 jobs after rising 11,200 in December. Retail employment has now risen for seven straight months.
 
Education and health payrolls added 25,000 jobs in January after employment grew by the most in 10 months in December.
 
Government payrolls dropped by 9,000 last month after falling 6,000 in December. The pace is moderating as local government layoffs, outside education, subside.
 
Average hourly earnings rose four cents last month. Hourly earnings have been rising steadily. They were up 2.1 percent in the 12 months through January.
 
"It may be that we are now getting to a point in the labor market where we are going to see an upward creep in average hourly earnings," said John Ryding, chief economist at RDQ Economics in New York. "That's going to be good for the consumer and they need help because they are being whacked by the payrolls tax increase."
 
The length of the workweek for the average worker was steady at 34.4 hours for a third straight month.

You May Like

Karzai's Legacy: Missed Opportunities?

Afghanistan's president leaves behind a much different nation than the one he inherited, yet his legacy from 13 years in power is getting mixed reviews More

Video Secret Service Chief Under Fire for White House Security Breach

Julia Pierson faces tough questions from lawmakers after recent intrusion at White House, says: 'It is clear that our security plan was not executed properly' More

Frustrated, Liberian Students Want Ebola Fight Role

Thousands have volunteered to go to counties, rural villages to talk to people in their language about deadly virus More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Malaysia Struggles to Stop People Joining Jihadi
X
Mahi Ramakrishnan
September 30, 2014 2:16 PM
Malaysian authorities say militant groups like the so-called "Islamic State" have used social media to entice at least three dozen Malaysian Muslims to fight in what they call "jihad" in Syria and Iraq. As Mahi Ramkrishnan reports from Kuala Lumpur, counterterrorism police are deeply worried about what could happen when these militants return home.
Video

Video Malaysia Struggles to Stop People Joining Jihad

Malaysian authorities say militant groups like the so-called "Islamic State" have used social media to entice at least three dozen Malaysian Muslims to fight in what they call "jihad" in Syria and Iraq. As Mahi Ramkrishnan reports from Kuala Lumpur, counterterrorism police are deeply worried about what could happen when these militants return home.
Video

Video Could US Have Done More to Stop Rise of Islamic State?

President Obama says airstrikes against Islamic State militants in Syria will likely continue for some time because, in his words, "there is a cancer that has grown for too long." So what if President Obama had acted sooner in Syria to arm more-moderate opponents of both the Islamic State and the Syrian government? VOA State Department Correspondent Scott Stearns reports from the United Nations.
Video

Video Treasure Hunters Seek 'Hidden Treasure' in Central Kenya

Could a cave in a small village in central Kenya be the site of buried treasure? A rumor of riches, left behind by colonialists, has some residents dreaming of wealth, while others see it as a dangerous hoax. VOA's Gabe Joselow has the story.
Video

Video Iran's Rouhani Skeptical on Syria Strikes

Iranian President Hassan Rouhani expressed skepticism Friday that U.S.-led airstrikes in Iraq and Syria could crush Islamic State militants. From New York, VOA’s Margaret Besheer reports the president was also hopeful that questions about Iran’s nuclear program could be resolved soon.
Video

Video US House Speaker: Congress Should Debate Authorization Against IS

As wave after wave of U.S. airstrikes target Islamic State militants, the speaker of the Republican-controlled House of Representatives says he would be willing to call Congress back into session to debate a formal, broad authorization for the use of military force. VOA’s Michael Bowman reports from Washington, where legislators left town 10 days ago for a seven-week recess.
Video

Video Ebola Patients Find No Treatment at Sierra Leone Holding Center

At a holding facility in Makeni, central Sierra Leone, dozens of sick people sit on the floor in an empty university building. They wait in filthy conditions. It's a 16-hour drive by ambulance to Kailahun Ebola treatment center. Adam Bailes was there and reports on what he says are some of the worst situations he has seen since the beginning of this Ebola outbreak. And he says it appears case numbers may already be far worse than authorities acknowledge.
Video

Video Identifying Bodies Found in Texas Border Region

Thousands of immigrants have died after crossing the border from Mexico into remote areas of the southwestern United States in recent years. Local officials in south Texas alone have found hundreds of unidentified bodies and buried them in mass graves in local cemeteries. Now an anthropologist and her students at Baylor University have been exhuming bodies and looking for clues to identify them. VOA’s Greg Flakus has more from Waco, Texas.
Video

Video Ebola Robs Liberians of Chance to Say Good-Bye to Loved Ones

In Liberia, where Ebola has killed more than 1,500 people, authorities have worked hard to convince people to allow specialized burial teams to take away dead bodies. But these safety measures, while necessary, make it hard for people to say good bye to their loved ones. VOA's Anne Look reports on the tragedy from Liberia.
Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.

AppleAndroid

World Currencies

EUR
USD
0.7866
JPY
USD
109.25
GBP
USD
0.6139
CAD
USD
1.1120
INR
USD
61.428

Rates may not be current.