U.S. gains 157K jobs; jobless rate rises to 7.9%
A jobs report on Friday showed the economy may be healthier than experts thought, as employers in nearly every business sector added workers at a faster-than-expected pace.
Employment increased by 157,000 jobs in January, and hiring in the prior two months was stronger than initially estimated, the Bureau of Labor Statistics said.
The stock market cheered in reaction. The Dow Jones industrial average closed above 14,000 — at 14,009.79 — for the first time since 2007. The market shot up 100 points in the opening minutes of trading over the jobs report.
“It's good news for Wall Street and for Main Street,” said Stuart Hoffman, chief economist at PNC Financial Services Group in Pittsburgh. “Companies are hiring more than we'd thought.”
Monthly job gains averaged about 200,000 in November through January, according to BLS revisions. That three-month average far exceeded the 168,000 monthly average for all of 2012.
The agency revised upward the estimated job gains for November from 161,000 to 247,000, and for December from 155,000 to 196,000. Job gains are based on a survey of employers.
The revisions show late-year hiring was healthy, despite the sputtering economy and the threat of deep spending cuts and tax increases from “the fiscal cliff.”
Hoffman said he drew “comfort” from the more robust hiring because it contrasted with surprising news on Thursday that the nation's gross national product — the total of goods and serviced produced — contracted in the fourth quarter by 0.1 percent.
“The employment growth belies how weak the economy really was, because otherwise you wouldn't get that kind of jobs report,” said the economist.
The January unemployment rate inched upward to 7.9 percent from 7.8 percent in December, the government said. The rate is based on a survey of households.
The nation added nearly 2.2 million jobs in 2012, up from initial estimates of about 1.85 million, or an average 30,000 more per month.
“This shows the private-sector economy is expanding, although not as fast as we'd like to see it,” said Kenneth Mayland, an economist at Clearview Economics, Pepper Pike, Ohio.
The number of Americans without jobs rose 1 percent, to 12.3 million people in January from 12.2 million in December.
People out of work for at least 27 weeks, a measure known as the “long-term unemployed,” was relatively unchanged at 4.7 million.
“We need more significant job growth. We have a long way to go,” said Antony Davies, associate professor of economics at Duquesne University.
Even with more than 143 million people employed, the United States still is about 3 million jobs short of average employment in 2009, said Davies. Plus, the working-age population has grown by about 5 million since then, he said.
The labor force participation rate, the ratio of working age (16 or older) people in the workforce, remained at 63.6 percent last month, where it's been since November.
Friday's report also revealed a notable shift in the job market: More hiring by construction companies. They added 28,000 jobs in January and nearly 100,000 over the past four months. Those gains are consistent with a rebound in home construction and a broader recovery in housing.
“The only place jobs are falling is in government,” said Hoffman.
Retailers added 33,000 positions. Health care gained 23,000 jobs. Manufacturers reported an increase of 4,000. Restaurants and hotels added 17,000.
The size of the labor force — those working or actively seeking a job — expanded by 143,000 during the month to 155.6 million people. A larger labor force has the effect of pushing up the rate of unemployment.
Thomas Olson is a staff writer for Trib Total Media. He can be reached a 412-320-7854 or at email@example.com.