Weak US jobs report also offers optimism

The US economy added 113,000 new jobs in January, far fewer than the 185,000 that economists had forecast, adding concerns that its recovery is losing momentum.

For a second straight month, figures were far below last year’s average monthly gain of 194,000. Yet the jobs report the government issued on Friday offered cause for optimism.

Hiring was strong in construction and professional services, hinting that cold weather was probably not a major factor in January’s job creation.

However, government authorities at all levels shed significant numbers of workers, with the retail sector shedding jobs for the first time since March following a weak holiday shopping season.

“Investors are giving the report the benefit of the doubt because of the weather situation,” Donald Selkin, chief market strategist at National Securities in New York told the Reuters news agency.

The US unemployment rate in January hit a five-year low of 6.6 percent, the lowest level since October 2008, just above the 6.5 percent level that Fed officials had said would prompt them to consider raising benchmark interest rates from near zero.

The second straight month of weak job growth could pose a problem for the Fed, which is betting on an accelerating recovery as a reason to keep scaling back its bond purchases.

“This isn’t good news,” said Brookings Institution economist Justin Wolfers.

“Today’s data suggest recent trends of good-but-not-great jobs growth is continuing. But they warn us to be wary of a slowdown”, the AFP news agency quoted Wolfers saying.

Strong numbers?

Still, the monthly household survey report showed a surge in people returning to the workforce and getting jobs, 638,000 more people had work last month over December.

Pulling the overall unemployment rate down to 6.6 percent from 6.7 percent in December and 7.9 percent a year ago.

And the labour force participation rate rose to 63.0 percent, though that remains extremely low on historical standards.

The White House trumpeted the 47th month of net job creation since the Great Recession ended in 2009 and the unemployment rate hitting its lowest level in more than five years.

“But the economy is still healing from the Great Recession and steps are still needed to expand economic opportunity,” said Jason Furman, chairman of US President Barack Obama’s Council of Economic Advisers.

He called for Congress to renew expired unemployment benefits for 1.7 million jobless people, and to support other job creation measures pushed by Obama.