Unemployment rate drops to 3-year lowPosted by: RJ and Makay on Feb 03, 2012  
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The nation’s unemployment rate fell to a 3-year low, to 8.3% in January, as non-farm payrolls added 243,000 jobs, the U.S. Labor Department reported today. The monthly job increase was the most since April of last year. The numbers exceeded expectations and were a strong indication that the recovery is spreading to the labor markets.
The biggest job gains were seen in manufacturing, professional and business services, and leisure and hospitality. The private sector added 257,000 jobs, while government jobs decreased by 14,000.
“Employers are stepping up new hires that had been postponed due to the uncertainty posed by recession fears in Europe,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ in New York. “The Fed is probably not going to stay on hold as long as they think.”
Factory workers averaged 41.9 hours of work each week in January, the highest number since January 1998, and overtime hours rose to its highest since March 2007. Average hourly earnings gained 0.3% to $23.29, the report said.
Service provider employment increased by 162,000, the best showing in four months.
“We are hiring quite rapidly now, all in sales and service,” said Vivek Ranadive, the chief executive officer of Tibco Software Inc. of Palo Alto California.
“We still have a long way to go before the labor market can be said to be operating normally,” said Ben Bernanke at a House Budget Committee meeting yesterday. “Fortunately over the past few months, indicators of spending, production and job-market activity have shown some signs of improvement.”
Despite the rosy report, various economic indicators of the recovery are still mixed. Sales of existing homes have begun to rise, though home values are still falling. Consumer spending continues to be restrained as consumers build up savings.
“It’s a steady grind in the right direction, but it’s a grind,” said Omair Sharif, U.S. economist at the Royal Bank of Scotland. “You’re going to have a situation where you take a couple steps forward and a step backward.”
Source:
Unemployment drops to 8.3%; Payrolls in U.S. jump 243,000 (http://www.bloomberg.com/news/2012-02-03/payrolls-in-u-s-jumped-243-000-in-january-unemployment-rate-drops-to-8-3-.html). Bloomberg, February 3, 2012
U.S. jobless rate falls to 3-year low, report shows (http://www.nytimes.com/2012/02/04/business/economy/us-economy-added-243000-jobs-in-january-unemployment-rate-is-8-3.html). New York Times, February 3, 2012
