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January Surge in US Hiring Lowers Unemployment to 8.3 Percent

Thomas Warren installs a fuel cell on a Freightliner truck at a plant where the laid off workers will be called back to work to meet increasing demand, Cleveland, N.C., January 12, 2012.

There's more evidence that the U.S. economy is improving. The U.S. Labor Department says private sector companies added 243,000 jobs in January, pushing the unemployment rate down to 8.3 percent from 8.5 in December. The latest reading lifted the Dow Jones Industrial Average to its highest close since before the 2008 financial crisis, and helped lift investor confidence around the world.

For job seekers - a welcome ray of hope. The job market is improving and unemployment is at its lowest level in nearly three years.

"Job growth was widespread in the private sector in January, with the largest gains occurring in professional and business services, leisure and hospitality and manufacturing," said John Galvin, acting commissioner at the Bureau of Labor Statistics.

The number of jobs created last year also was revised higher - up 60,000 in November and December.

Reaction was immediate on Wall Street. Just five minutes after the opening bell, the Dow Jones average was up more than one percent.

Economist Stewart Hoffman said the jobless rate has fallen for five consecutive months.

"So when you get consistent decline in the unemployment rate and three out of the last five months job growth have topped 200,000, I think you're at the self-sustaining sort of reinforcing positive with this number and the revisions," said Hoffman.

Kicking off a new jobs initiative for military veterans on Friday, President Barack Obama welcomed the strong jobs report, but warned against complacency.

"The economy is growing stronger. The recovery is speeding up. And we've got to do everything in our power to keep it going," said the president.

"It's been 35 months of unemployment above 8 percent," said Republican presidential contender and former Massachusetts Governor Mitt Romney.

With Republican presidential hopefuls arguing that the president's economic policies have failed, Yahoo economic editor Daniel Gross said Republicans are likely to push back.

"The only people disheartened by this report were probably Republican campaign consultants," said Gross.

That pushback was evident at a joint economic hearing Friday as Republican Congressman Kevin Brady clashed with Democratic Congresswoman Carolyn Maloney.

"For 23 months we've been gaining jobs in this country, we should be pleased with this news," said Maloney.

"Madame Chairman, my only point, I think, ours is, we do think these numbers are encouraging. Our concern is the unemployment rate is going down because people are giving up," said Brady.

Republicans argue that counting those who have given up looking for work, and those who have been unemployed more than a year, the actual unemployment rate is closer to 15 percent.