America’s employers added 146,000 jobs in January — a pickup from the previous month, but still a somewhat lackluster pace that underscores the slow recovery as the nation’s labor market tries to get back to full throttle.
The latest snapshot of labor market activity, released by the Labor Department on Friday, also showed that the overall civilian unemployment rate dropped to 5.2 percent in January from 5.4 percent in December as people left the job market for any number of reasons. January’s jobless rate was the lowest since September 2001.
The 146,000 gain in payrolls in January — while the most since October — still fell short of economists’ forecasts for a more robust gain of around 200,000 for the month. Jobs gains for December came in at 133,000, down from an initial estimate of 157,000 just a month ago.
“There’s still a level of frustration. The economy is producing a moderate amount of job growth, but not a satisfying amount of job growth. That means there are a limited number of new opportunities for workers,” said economist Ken Mayland, president of ClearView Economics.
President Bush’s first term in office ended up showing a net gains in payroll jobs. From January 2001 to January 2005, the economy generated a net gain of 119,000 jobs. That allows Bush to escape being what Democrats and other critics had projected as the first president since Herbert Hoover to have a net loss of jobs on his watch.
Speaking in Omaha, Neb., Friday to plug his Social Security plans, Bush said he was pleased with the new report.
“That’s a good sign. More people are going to work around our country,” he said. “But we shouldn’t be content. I’m looking forward to working with the members of Congress to create the conditions for continued economic expansion.”
Questions about the health of the nation’s jobs market dogged Bush throughout his first term and was a hot-button issue in the presidential campaign. Ultimately, the jobs situation and the economy wasn’t enough of a concern to deny Bush a second term.
The Federal Reserve, encouraged by the economy’s performance, boosted a key short-term interest rate Wednesday by one-quarter percentage point to 2.50 percent, its sixth increase since June. The Fed also stuck with a measured approach to raising rates in the months ahead.
On the jobs front, Fed policy-makers said: “labor market conditions continue to improve gradually.” For all of 2004, the economy added 2.2 million jobs.
Friday’s employment report contained revisions to data going back to January 2000.
Last year, the economy clocked a 4.4 percent increase in growth, its best performance in five years. Looking ahead, analysts predict that the economy will expand by 3.5 percent or more in 2005. That would be sufficient to spur modest job growth in the months ahead, analysts say.
The administration is predicting the payrolls will grow by 2.1 million this year, a figure that private economists would be respectable.
Fed Chairman Alan Greenspan, speaking in London on Friday, stuck a somewhat encouraging note on a possible improvement to the United State’s yawning trade deficits. Greenspan said a variety of factors from a weaker dollar to tougher budget discipline in Congress may finally start to restrain the deficit’s explosive growth. Greenspan didn’t talk about the future course of interest rate policy in his speech.
In Friday’s report, there were employment gains in January in a wide variety of service sectors, including retail. These were partially offset by job losses at factories and in construction
Manufacturers, which were hardest hit by the 2001 recession and have struggled the most to get back on firm footing, lost 25,000 jobs in January, after shedding 7,000 in December. It marked the fifth straight month that the factory sector lost jobs.
Construction companies cut 9,000 positions in January, probably related to wintry weather. That came after 14,000 positions were added in December.
The service sector, the engine of job creation, showed hiring gains in January. Retailers added 19,200 jobs, an improvement from a loss of 8,100 in December. Job gains also were reported for education and health services, in the financial sector and in transportation.