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Mortgage News |
Mortgage News You Can Use January Jobless Rate Fell to 5.6%; Payrolls Rose 112,000 WASHINGTON -- The U.S. unemployment rate fell in January as businesses hired workers at the fastest clip in three years, although the job gains were well short of the pace economists say is necessary to revive the battered labor market. Nonfarm business payrolls grew by a net 112,000 in January, the biggest gain since December 2000, the Labor Department said Friday. The unemployment rate fell one-tenth of a percentage point to 5.6%, the lowest rate since President Bush was inaugurated in January 2001. The numbers surprised Wall Street. Economists surveyed by Dow Jones Newswires and CNBC had called for payrolls to grow by 160,000 and the unemployment rate to rise to 5.8%. But the data validated the Federal Reserve's view that the recovery in the labor market will be gradual even if the economy grows at an above-average pace. The U.S. gross domestic product expanded by 3.1% in 2003, and most forecasters are betting it will grow more than 4% this year. Fed policymakers, as a result, have grown increasingly confident the economic recovery won't fizzle. They have indicated, however, that they believe it may take at least a year for the jobs market to recover fully. Over the last three years, employers have cut more than two million nonfarm jobs. To replace those jobs within a year and keep up with population growth, economists estimate businesses would need to create about 400,000 jobs a month. That far exceeds the average of the late-1990s economic boom. Most forecasters expect the economy to generate about 200,000 jobs a month this year. In its report Friday, the Labor Department included its annual benchmark revisions, which showed that nonfarm employers continued to cut jobs through August of 2003. Since then, however, nonfarm jobs have grown 366,000. In December, employers added 16,000 jobs - more than the initial estimate of 1,000. In January, employers expanded payrolls in most major categories except manufacturing and professional business services. The manufacturing industry shed 11,000 jobs, less than half the decline in December. The professional business services industry shed 22,000 jobs, marking the first decline since August. But the service-producing industry added 105,000 jobs, including 22,000 jobs in retail trade. The construction industry added 24,000 jobs, up from 13,000 in December. The education and health-services industry added 22,000 jobs, down from 29,000 in December. The jobs growth coincided with a minuscule increase in average hourly earnings, which rose two cents to $15.49 in January. The average work rose by 12 minutes to 33.7 hours. Back to Original Article: Mortgage News You Can Use
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