News / Economy

    US Unemployment Rate Drops But Job Gains Disappoint

    Workers at US factory (file photo)
    Workers at US factory (file photo)

    Multimedia

    U.S. unemployment declined sharply last month to 9 percent, its lowest level in almost two years. But the economy gained far fewer jobs than expected. In its monthly report on employment, the Labor Department said the U.S. economy gained only a net total of about 36,000 jobs.  

    Experts say severe snowstorms in January may have contributed to the disappointing jobs report. The construction sector lost more than 30,000 jobs, and layoffs in transportation and warehousing added 40,000 more. As a result, employment gains were only a fraction of the more than 160,000 jobs economists were expecting.

    "Thirty-six thousand jobs added in a single month isn't even enough to keep up with the new workers the economy adds in a month. We need to see a level significantly higher than that to make headway," said ABC News Business analyst Dan Arnall.

    The bright spots were in manufacturing, which added 50,000 jobs - and in the retail sector, which saw hiring increase by 30,000. Employment numbers for November and December also were revised higher, showing 11 months of consecutive job growth.  

    The White House welcomed the decline in the national rate, but the president's top economic adviser, Austan Goolsbee, said unemployment remains unacceptably high. "Overall I think it shows continued progress, but it's not fast enough. The President is the first to say that. We’ve got to get the hiring rate up faster to get more people back to work," he said.

    The unemployment rate has now dropped eight-tenths of a percent since December, the steepest two-month decline in more than 50 years. Economists say the lower number means about half-a-million Americans have either found work - or have simply given up looking.  

    Despite his most optimistic assessment yet of the U.S. economy, Federal Reserve Chairman Ben Bernanke warned Thursday, it will take years before unemployment returns to normal levels. "Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established," he said.

    Although about a million jobs were created last year, the Labor Department says nearly 14 million Americans are still looking for work.

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