Anemic job growth in January sparks fears of slowdown
The Labor Department announced that only 113,000 jobs were created in January, 76,000 jobs below what was predicted. The "official" unemployment rate dropped 0.1% to 6.6%.
The horrible January numbers come on the heels of a December jobs meltodwn when only 75,000 new jobs were reported. That number was revised upward - by only 1000 - adding to worrisome signs that the economy is slowing to a crawl once again.
The labor market in January registered weak gains for the second straight month, a slowdown that could heighten fears about the economic recovery and may lead some to call on the Federal Reserve to reconsider its easy-money strategy.
U.S. payrolls increased by a seasonally adjusted 113,000 in January, the Labor Department said Friday. Job growth improved compared with December's gain, which was revised up by just 1,000 to 75,000, but was well below last year's average pace. The November increase was recast up by 33,000 to 274,000.
The January gain is weak compared to the 200,000-plus jobs added on average between August and November.
The unemployment rate, obtained through a separate survey, fell to 6.6% last month from 6.7% in December, the Labor Department said. The number of Americans who were employed and those part of the wider labor force both rose slightly.
Economists had expected a gain of 189,000 jobs and a 6.6% jobless rate, according to a Dow Jones Newswires survey.
December's weak payroll figure, and signs of weakness in the housing sector and emerging markets, sparked fears that 2014 could get off to a disappointing start.
January's report may heighten the concerns.
Consecutive weak employment reports could increase calls for the Fed to re-evaluate the wind-down of its bond-buying program. The Fed voted last month to reduce the pace of its monthly bond purchases by another $10 billion, $65 billion, despite December's disappointing payroll report. A continued step down of stimulus could be challenged given other signs of slowing growth and still mild inflation.
Before Friday's report, forecasting firm Macroeconomic Advisers said gross domestic product would expand at a 1.9% annualized pace in the first quarter. That would be a slowdown from 3.2% growth in the fourth quarter.
The latest data is a change from the fall, when job creation had sped up compared with the summer. That was in line with an economy that perked up, posting the strongest second-half growth since 2003.
The labor force participation rate rose minimally from 62.8% to 69.0%, still near 35 year lows.
One possible bright spot was the decline in workers unemployed for 27 weeks or longer, which fell by 232,000. But economists say that the drop could be explained by the loss of long-term unemployment benefits.
Each month we think it can't get much worse - and then it does.