Mixed signals on US jobless rate
Unemployment rate falls despite employers cutting 20,000 jobs in January.
A sharp increase in the number of people giving up looking for work is believed to have helped depress the jobless rate.
The number of so-called “discouraged job seekers” rose to 1.1 million in January from 734,000 a year ago.
Market reaction
Al Jazeera’s Patty Culhane, reporting from Washington, said: “What is going to be important here is how the markets and the general population react to these numbers.
“Whether they focus on the fact that jobs continue to be lost in the US economy or if they think that it doesn’t look quite as bad, at least statistically.
“The hope was that you would start to see an increase [in the number of jobs] – obviously the economy has started to grow, so the administration was hoping that jobs would follow suit.
“Most economists will tell you that this economy will have to add 400,000 jobs a month for the next three years to get back to where this country was before the recession began.”
Global stock markets were already at three-month lows before the figures were released.
‘Psychologically’ good
Eugenio Aleman, an economist with the Wells Fargo bank, said that although the figures reflected little change in the number of people working, the drop in the jobless rate was “good for the psychological aspect of the recovery”.
“This can improve consumer confidence, and maybe allow consumers to spend more” to boost overall economic activity,” he said.
Barack Obama, the US president, has declared that job creation will be his top priority in 2010.
“While unemployment remains a severe problem, today’s employment report contains encouraging signs of gradual labour market healing,” Christina Romer, the White House economic advisor, said on Friday.
Obama’s fellow Democrats fear voters could punish them in November’s congressional elections if the administration fails to make headway in tackling the high jobless rate.
Friday’s figures followed a revision of 2009 data, which showed about 600,000 more job losses than previously estimated.
For December, the data was revised to show a steep drop of 150,000 jobs instead of 85,000 previously estimated. But November data was revised to show a gain of 64,000 jobs instead of a rise of 4,000.