U.S. gains 157,000 jobs; jobless rate rises to 7.9 pct.
WASHINGTON (AP) - U.S. employers added 157,000 jobs in January, and hiring was much stronger at the end of 2012 than previously thought, providing reassurance that the job market held steady even as economic growth stalled.
The Labor Department report Friday showed a jump in hiring in the final two months of last year, just when the economy was sputtering and facing the threat of deep government spending cuts and tax increases from the fiscal cliff. The department revised up the estimated job gains for November from 161,000 to 247,000 and for December from 155,000 to 196,000.
The mostly encouraging jobs report included one negative sign: The unemployment rate rose to 7.9 percent from 7.8 percent in December. The rate is calculated from a survey of households, and more people in that survey said they were unemployed.
The monthly job gains are derived from a separate survey of employers.
The hiring picture over the past two years also looked stronger after the department's annual revisions. The revisions showed that employers added an average of roughly 180,000 jobs a month in 2012 and 2011. That was up from previous estimates of about 150,000.
"The significantly stronger payroll gains tell us the economy has a lot more momentum than what we had thought," Joseph LaVorgna, chief U.S. economist at Deutsche Bank, said in a research note.
Stocks surged immediately after trading began at 9:30 a.m. Eastern time, an hour after the jobs report was released. The Dow Jones industrial average jumped 130 points and briefly touched 14,000 for the first time in more than five years, before falling back.
Other economic news Friday contributed to the stock rally. Manufacturing expanded at a much faster pace in January compared with December, a private survey found. And construction spending rose in December at a healthy pace.
The employment report revealed a notable shift in the job market: More hiring by construction companies. They added 28,000 jobs in January and nearly 100,000 over the past four months. Those job gains are consistent with a rebound in home construction and a broader recovery in housing.
Retailers added 33,000 positions. Health care gained 23,000 jobs. Manufacturers reported a small increase of 4,000. Restaurants and hotels added 17,000.
The solid hiring in retail, construction, restaurants and hotels suggested that such companies expect consumer spending to hold up in coming months.
"The strong and steady job gains from retail trade and construction look a lot more like a normal economic expansion," said Scott Anderson, chief economist at Bank of the West. "This is a sign that consumer spending is playing a far more important role in this expansion than it has so far."
Average hourly wages rose 4 cents to $23.78 and have risen an encouraging 2.1 percent in the past 12 months. That's slightly above the inflation rate, which was 1.7 percent.
Last month's hiring should cushion the impact of the higher Social Security taxes that most consumers are paying this year. And it would help the economy resume growing after it shrank at an annual rate of 0.1 percent in the October-December quarter.
Higher Social Security taxes are reducing take-home pay for most Americans. A person earning $50,000 a year will have about $1,000 less to spend in 2013. A household with two high-paid workers will have up to $4,500 less. Taxes rose after a 2 percent cut, in place for two years, expired Jan. 1.
Analysts expect the Social Security tax increase to shave about a half-point off economic growth in 2013, since consumers drive about 70 percent of economic activity.
The hit to consumers is coming at a precarious moment for the economy. It contracted in the fourth quarter for the first time in 3½ years. The decline was driven largely by a steep cut in defense spending and a drop in exports. Analysts generally think those factors will prove temporary and that the economy will resume growing.
Still, the contraction last quarter points to what are likely to be key challenges for the economy this year: the prospect of sharp government spending cuts and uncertainty over whether Congress will agree to raise the federal borrowing cap.
Most analysts predict that the economy will grow again in the January-March quarter, though likely at a lackluster annual rate of around 1 percent. They expect the economy to expand about 2 percent for the full year.
Two key drivers of growth improved last quarter: Consumer spending increased at a faster pace. And businesses invested more in equipment and software.
In addition, homebuilders are stepping up construction to meet rising demand. That could generate even more construction jobs.
And home prices are rising steadily. That tends to make Americans feel wealthier and more likely to spend. Housing could add as much as 1 percentage point to economic growth this year, some economists estimate.
Auto sales reached their highest level in five years in 2012 and are expected to keep growing this year. That's boosting production and hiring at U.S. automakers and their suppliers.
The Labor Department report Friday showed a jump in hiring in the final two months of last year, just when the economy was sputtering and facing the threat of deep government spending cuts and tax increases from the fiscal cliff. The department revised up the estimated job gains for November from 161,000 to 247,000 and for December from 155,000 to 196,000.
The mostly encouraging jobs report included one negative sign: The unemployment rate rose to 7.9 percent from 7.8 percent in December. The rate is calculated from a survey of households, and more people in that survey said they were unemployed.
The monthly job gains are derived from a separate survey of employers.
The hiring picture over the past two years also looked stronger after the department's annual revisions. The revisions showed that employers added an average of roughly 180,000 jobs a month in 2012 and 2011. That was up from previous estimates of about 150,000.
"The significantly stronger payroll gains tell us the economy has a lot more momentum than what we had thought," Joseph LaVorgna, chief U.S. economist at Deutsche Bank, said in a research note.
Stocks surged immediately after trading began at 9:30 a.m. Eastern time, an hour after the jobs report was released. The Dow Jones industrial average jumped 130 points and briefly touched 14,000 for the first time in more than five years, before falling back.
Other economic news Friday contributed to the stock rally. Manufacturing expanded at a much faster pace in January compared with December, a private survey found. And construction spending rose in December at a healthy pace.
The employment report revealed a notable shift in the job market: More hiring by construction companies. They added 28,000 jobs in January and nearly 100,000 over the past four months. Those job gains are consistent with a rebound in home construction and a broader recovery in housing.
Retailers added 33,000 positions. Health care gained 23,000 jobs. Manufacturers reported a small increase of 4,000. Restaurants and hotels added 17,000.
The solid hiring in retail, construction, restaurants and hotels suggested that such companies expect consumer spending to hold up in coming months.
"The strong and steady job gains from retail trade and construction look a lot more like a normal economic expansion," said Scott Anderson, chief economist at Bank of the West. "This is a sign that consumer spending is playing a far more important role in this expansion than it has so far."
Average hourly wages rose 4 cents to $23.78 and have risen an encouraging 2.1 percent in the past 12 months. That's slightly above the inflation rate, which was 1.7 percent.
Last month's hiring should cushion the impact of the higher Social Security taxes that most consumers are paying this year. And it would help the economy resume growing after it shrank at an annual rate of 0.1 percent in the October-December quarter.
Higher Social Security taxes are reducing take-home pay for most Americans. A person earning $50,000 a year will have about $1,000 less to spend in 2013. A household with two high-paid workers will have up to $4,500 less. Taxes rose after a 2 percent cut, in place for two years, expired Jan. 1.
Analysts expect the Social Security tax increase to shave about a half-point off economic growth in 2013, since consumers drive about 70 percent of economic activity.
The hit to consumers is coming at a precarious moment for the economy. It contracted in the fourth quarter for the first time in 3½ years. The decline was driven largely by a steep cut in defense spending and a drop in exports. Analysts generally think those factors will prove temporary and that the economy will resume growing.
Still, the contraction last quarter points to what are likely to be key challenges for the economy this year: the prospect of sharp government spending cuts and uncertainty over whether Congress will agree to raise the federal borrowing cap.
Most analysts predict that the economy will grow again in the January-March quarter, though likely at a lackluster annual rate of around 1 percent. They expect the economy to expand about 2 percent for the full year.
Two key drivers of growth improved last quarter: Consumer spending increased at a faster pace. And businesses invested more in equipment and software.
In addition, homebuilders are stepping up construction to meet rising demand. That could generate even more construction jobs.
And home prices are rising steadily. That tends to make Americans feel wealthier and more likely to spend. Housing could add as much as 1 percentage point to economic growth this year, some economists estimate.
Auto sales reached their highest level in five years in 2012 and are expected to keep growing this year. That's boosting production and hiring at U.S. automakers and their suppliers.
""""""""U.S. gains 157,000 jobs; jobless rate rises to 7.9 pct."""""""
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Only in Obamanomics can we see both the increase of jobs AND a rise in the unemployment rate......
Prediction : February's unemployment numbers will be "stronger than previously thought." ....STAY TUNED FOR THE MARCH AND APRIL JOBS REPORTS !
Only a liberal could look at this as good news. How bad does it have to get before liberals will realize their ideology, while having many good points in theory, is an absolute failure in the real world?
Obamanomics...... aint it grand, economic growth so slow it actually contracted last quarter...... but fear not, it might turn around to an entire 1% annual growth for 2013.......
WooHoo 8% UE and 1% growth....... anyone who voted for four more years of this really should be embarrassed.
""""""""Â The rate is calculated from a survey of households, and more people in that survey said they were unemployed."""""
WTH is this....... shouldn't the UE be calculated by actual UE numbers, why in the world would they rely on a survey?Â
IMHO, the only reason that makes sense is that this estimated number is lower than the actual UE rate.
 @kramr 'WTH is this....... shouldn't the UE be calculated by actual UE numbers, why in the world would they rely on a survey? '
Well, 'yes' would seem to be the correct and appropriate answer. Â In the interest(s) of... 'cost, efficiency', ' timeliness'..etc. the Fed Govt allows the BLS to use sampling to ESTIMATE the number of [officially] unemployed. Of course, the larger question remains: if 160,000 or so jobs were 'added' to the economy, why did the unemployment rate just jump? Â Short Answer: the 'official estimate' is inherently biased toward underestimating the true number -- how darn convenient for the lowlifes in Wash DC... Â The official UE rate is just barely -- BARELY --- valid anymore.
157,000 new jobs is nothing. In June there will be another 6 million people looking for a job which will add on to the millions already unemployed.
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Think of all the illegals who have taken jobs away from Americans who often work under the table and pay no taxes. They are partly responsible for the high unemployment. Making them citizens would only make unemployment higher.
 @RalphCramden Indeed. And we could also add in another 140,000+ newly authorized Green Card holders into the labor force each month.  It just doesn't pay to be a law-abiding American anymore I guess..