MW: Jobless rate falls to 9.7%, lowest since August
Nonfarm payroll employment down 20,000 in January
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) -- Latest government data on the U.S. labor market presented a mixed picture but overall showed signs of healing from the devastating recession over the past two years.
Surprising analysts, the Labor Department reported that the unemployment rate fell to 9.7% in January from 10% in December. This is the lowest unemployment rate since August. This raised some hope that the unemployment rate peaked at 10.1% in October.
Economists surveyed by MarketWatch had expected the unemployment rate to remain steady at 10%. Read forecast of all major U.S. indicators
On the other hand, nonfarm payroll employment declined again, whereas economists had been forecasting a small increase. In the closely watched survey of business establishments, the U.S. economy lost 20,000 nonfarm jobs in January. Read full government data.
Economists surveyed by MarketWatch were forecasting payrolls to rise 25,000.
But over the last three months there has been a dramatic lessening in the pace of job losses compared with earlier in 2009.
"All in all, we see encouraging signs of progress in labor market conditions and expect to see much better payroll performance in coming months," said David Greenlaw, economist at Morgan Stanley.
"We judge there was more good news than bad news in the report," agreed analysts at RDQ Economics.
Some analysts questioned the factors that led to a decline in the jobless rate. The government estimated that employment rose by 541,000. The level of unemployment fell by 430,000. The labor force rose by 11,000.
On Wall Street, stock prices fell again. Bond yields were flat, and the dollar was mixed against other major currencies. See our full market coverage.
Special factors
The payroll data included benchmark revisions and other special factors that may make them a less-reliable indicator this month. One special factor was temporary hiring by the federal government for the 2010 Census. In January, 9,000 workers were hired.
In January, job losses continued for construction and in transportation. The bulk of the job less was due to a 75,000 loss in construction employment, including 60,000 in nonresidential building trades.
Temporary service employment increased for the fourth consecutive month, a bullish sign for permanent hiring.
Employment in the manufacturing sector increased for the first month since January 2007. Since then, 2.2 million manufacturing jobs have been lost.
