News

Employment fails to rebound strongly from winter chill

Employment fails to rebound strongly from winter chill

JOBLESS: A job seeker (C) talks to an exhibitor at the Colorado Hospital Association health care career fair in Denver April 9. Photo: Reuters/Rick Wilking

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. employers hired far fewer workers than expected in January and job gains for the prior month were barely revised up, suggesting a loss of momentum in the economy, even as the unemployment rate hit a new five-year low of 6.6 percent.

Nonfarm payrolls rose only 113,000, the Labor Department said on Friday. But with construction recording the largest increase in jobs in a year, cold weather probably was not a major factor in January.

“It is an improvement but a number this soft does feed worries about slowing U.S. growth,” said Joe Manimbo, senior market analyst at Western Union Business Solutions.

The second straight month of weak hiring – marked by declines in retail, utilities, government, and education and health employment – could be a problem for the Federal Reserve, which is tapering its monthly bond-purchasing stimulus program.

It was the weakest two months of job growth in three years. December payrolls were raised only 1,000 to 75,000.

U.S. stock index futures fell sharply after the report, while prices for U.S. Treasury debt rallied. The dollar fell against the euro and the yen.

The data also comes on the heels of a report on Monday showing a surprise drop in factory activity to an eight-month low in January. The economy grew at a robust 3.7 percent annual rate in the second half of 2013, buoying hopes that it was now on a path to sustained growth.

That optimism is being tested, with other data in January showing slower automobile sales.

But there was a silver lining in the employment report. The jobless rate dropped a tenth of a percentage point to 6.6 percent last month, the lowest since October 2008.

Economists polled by Reuters had forecast payrolls increasing 185,000 last month and the unemployment rate to hold steady at 6.7 percent.

The household survey from which the jobless rate is derived found strong gains in employment. In addition, more people came into the labor force, an encouraging sign for the labor market.

The participation rate, or the proportion of working-age Americans who have a job or are looking for one, increased to 63 percent from 62.8 percent in December, when it fell back to the more than 35-year low hit in October.

“We think the employment market is improving, but will do so in fits and starts,” said David Carter, chief investment officer at Lenox Wealth Advisors in New York. “If the employment market continues to weaken, it is likely that the Fed will slow its tapering plans.”

The unemployment rate is now flirting with the 6.5 percent level that Fed officials have said would trigger discussions over when to raise benchmark interest rates from near zero.

But policymakers have made it clear that rates will not rise any time soon even if the unemployment threshold is breached.

The private sector accounted for all the hiring in January. Government payrolls fell 29,000, the largest decline since October 2012.

Manufacturing employment increased 21,000, rising for a sixth month. Retail sector jobs fell 12,900 after strong increases in the prior months, the first decline since March.

Construction payrolls bounced back 48,000 after being depressed by the weather in December. It was the largest increase since December 2012.

Average hourly earnings rose five cents. The length of the workweek was steady at an average of 34.4 hours.

Friday’s report included revisions to data on payrolls, the workweek and earnings going back to 2009.

Revisions to this data, which is drawn from a survey of employers, showed 369,000 more jobs than previously thought were created in the 12 months through March 2013, on a seasonally adjusted basis.

The report also incorporated new population estimates.

(Reporting by Lucia Mutikani; Additional reporting by Michael Connor and Ryan Vlastelica; Editing by Andrea Ricci)

Recent Headlines

in Sports

No Mo’ne on mound, Philly loses to Chicago in LLWS

The 16 Little League baseball teams from around the world line the field at Volunteer Stadium during the opening ceremony of the 2014 Little League World Series tournament in South Williamsport, Pa., Thursday, Aug. 14, 2014.

Chicago is making its first appearance in 31 years in the Little League World Series. The victory sends the Great Lakes champs into the U.S. title game on Saturday against Las Vegas.

in Sports

Bell & Blount play in Eagles victory over Steelers

Pittsburgh Steelers running back LeGarrette Blount, right, tries to strip the ball from fellow Steelers running back Le'Veon Bell in a drill during a combined NFL football training camp session with the Buffalo Bills in Latrobe, Pa. on Wednesday, Aug. 13, 2014.

Steelers running backs Le'Veon Bell and LeGarrette Blount both played one day after each was arrested for marijuana offenses. Bell finished with 23 yards on nine carries, while Blount ran for 32 yards on seven carries.

in Local Sports

Preseason No. 1 Eastern opens 2014 season on Saturday

Courtesy of Eastern Washington University

The top-ranked Eagles host Sam Houston State in Cheney on Saturday, August 23 in the inaugural FCS Showcase.

in Local Sports

Couples still seeking elusive hometown win

Fred Couples walks up to the ninth green during the second round of the Masters golf tournament Friday, April 11, 2014, in Augusta, Ga.

For all the tournament's won during his career, Couples has still never won playing back home in or around Seattle where he grew up.

in Local Sports

Seattle wins No. 1 pick in WNBA lottery

seattle storm logo

It's Seattle's first No. 1 pick since the 2002 season when the Storm selected Sue Bird. The team also had the first pick in 2001, when they chose Lauren Jackson.