US jobless fall to 5-month low
Source: Agencies |
February 7, 2010, Sunday
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Print Edition
Print Edition
THE US unemployment rate surprisingly fell to a five-month low of 9.7 percent in January and factory payrolls grew for the first time since 2007, hinting at a labor market recovery even though the economy lost 20,000 jobs.
President Barack Obama cautiously welcomed the figures but said more needed to be done to put people back to work. Obama and fellow Democrats fear voters could punish them in November congressional elections if no headway is made in tackling unemployment as the United States emerges from recession.
The decline in payrolls reported by the Labor Department on Friday was far smaller than the 150,000 drop posted in December. November's data from the survey of employers was revised sharply higher to a gain of 64,000, up from 4,000.
The jobless rate of 9.7 percent, based on a separate household survey, was lower than the 10 percent in December. That survey found employment rising, with the size of the labor force roughly flat.
Analysts had expected payrolls to rise by 5,000 and the unemployment rate to edge up to 10.1 percent.
"The wheels of the economy are turning. The improvement in the employment data does match the increase in GDP of the last two quarters, so it's not a fluke," said Chris Rupkey, senior financial economist at Bank of Tokyo/Mitsubishi UFJ in New York, referring to growth data for the fourth quarter of 2009.
"The economic recovery looks much more sustainable today."
Details of the report were relatively upbeat. The length of the average work week hit its highest in a year and overtime paid in manufacturing was the most since September 2008, suggesting growing pressure to add to payrolls.
But some analysts were skeptical of the drop in the jobless rate and believed it would head higher again. The pickup in factory employment helped to lift US stocks, despite lingering worries about European fiscal problems.
US government debt prices rose and the dollar hit an 8-1/2 month high versus the euro.
President Barack Obama cautiously welcomed the figures but said more needed to be done to put people back to work. Obama and fellow Democrats fear voters could punish them in November congressional elections if no headway is made in tackling unemployment as the United States emerges from recession.
The decline in payrolls reported by the Labor Department on Friday was far smaller than the 150,000 drop posted in December. November's data from the survey of employers was revised sharply higher to a gain of 64,000, up from 4,000.
The jobless rate of 9.7 percent, based on a separate household survey, was lower than the 10 percent in December. That survey found employment rising, with the size of the labor force roughly flat.
Analysts had expected payrolls to rise by 5,000 and the unemployment rate to edge up to 10.1 percent.
"The wheels of the economy are turning. The improvement in the employment data does match the increase in GDP of the last two quarters, so it's not a fluke," said Chris Rupkey, senior financial economist at Bank of Tokyo/Mitsubishi UFJ in New York, referring to growth data for the fourth quarter of 2009.
"The economic recovery looks much more sustainable today."
Details of the report were relatively upbeat. The length of the average work week hit its highest in a year and overtime paid in manufacturing was the most since September 2008, suggesting growing pressure to add to payrolls.
But some analysts were skeptical of the drop in the jobless rate and believed it would head higher again. The pickup in factory employment helped to lift US stocks, despite lingering worries about European fiscal problems.
US government debt prices rose and the dollar hit an 8-1/2 month high versus the euro.
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