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Employers added 113,000 jobs; unemployment rate dips to 6.6%

| Friday, Feb. 7, 2014, 8:45 a.m.

Stronger economic trends that emerged in the second half of 2013 remain in place, economists say, despite a second month of weaker job gains tied to winter weather.

The Labor Department on Friday said employers added 113,000 jobs in January, far fewer than the average monthly gain of 194,000 last year. That follows December's lower-than-expected increase of 75,000.

Job gains averaged only 154,000 in the past three months, down from 201,000 in the preceding three months.

The number of people working or looking for work rose slightly, a sign of optimism about finding work. Some found jobs, reducing the unemployment rate to 6.6 percent, the lowest rate since October 2008.

“The 6.6 percent rate is an indication that the economy is moving into a better zone all the way around. This report does not look bad at all,” said George Mokrzan, director of economics at Huntington Bank in Columbus, Ohio.

Stocks rose for the second straight day, pushing the Dow Jones industrial average up 165.55 to 15,794.08.

“Growth in employment was a function of the labor force participation rate, which improved by two-tenths of a percentage point, counter to the trend we've seen in recent years,” Mokrzan said. “It's for the right reasons — 331,000 people came into the labor force that weren't looking for jobs previously, and that's quite encouraging.”

The uptick to 63 percent could have been caused by the expiration of unemployment benefits in December, motivating some people to look for work, said James Burnham, economics professor at Duquesne University's School of Business.

An estimated 1.7 million long-term unemployed people lost federal benefits when Congress failed to pass an extension on Dec. 28. Total long-term unemployed of 3.6 million is more than one-third of the 10.2 million out of work, the report said.

Mark Zandi, chief economist at Moody's Analytics in West Chester, said the recent weakness is largely weather-related, “so nothing has changed from last year. The weather since December has been very bad, cold and stormy, affecting business and hiring.”

Weather affects the numbers directly when workers can't get to jobs and don't get paid, such as when the construction sector lost 22,000 jobs in December, or indirectly, such as with January's wintry weather, when consumers don't spend at retailers and auto dealers.

“Weather's fingerprints were all over the January numbers, even though we saw a bounce-back in construction,” Zandi said.

Construction companies added 48,000 jobs last month, the largest one-month gain since April 2007.

Said Huntington's Mokrzan: “Weather can have a temporary effect, but it is real. I would expect a rebound once we get to spring, because manufacturing and construction are picking up.”

Manufacturing added 21,000 jobs in January; wholesale trade added 13,900; professional and business services, 36,000; and leisure and hospitality, 24,000.

Job losses were in retail trade, down 13,000, and government, off 12,000.

Health care employment was unchanged for a second month.

Sluggish job growth has raised doubts about the Federal Reserve's plan to scale back its economic stimulus.

“The Fed will probably continue to taper at the $10 billion rate; that's pretty much in place,” Mokrzan said.

Weak job gains in December were signs of economic weakness and sent stock prices sinking despite hopeful signs about the global economy, experts said. Growth in the United States came at a sturdy 3.7 percent annual pace in the second half of the year. The Dow Jones industrial average finished 2013 at a record high.

On Monday, an industry survey found that manufacturing grew more slowly in January than in December. That report contributed to a 326-point plunge in the Dow.

John D. Oravecz is a Trib Total Media staff writer. Reach him at 412-320-7882 or

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