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US Jobless Rate Falls to Lowest In 3 Years: Republican Nightmare

Unemployment Drops to 8.3%; Payrolls in U.S. Jump 243,000

By Bob Willis
-

Feb 3, 2012 1:53 PM GMT


Employment climbed more than forecast
in January and the U.S. jobless rate unexpectedly fell to the
lowest in three years, casting doubt on the Federal Reserve’s
pledge to keep interest rates low until late 2014.
The 243,000 increase in payrolls was the most since April
and exceeded all forecasts in a Bloomberg News survey, Labor
Department figures showed in Washington. The unemployment rate
dropped to 8.3 percent, the lowest since February 2009.
Stock futures and bond yields jumped as the report fueled
optimism the economy is weathering the European debt crisis. The
data may boost President Barack Obama’s re-election bid and come
one week after Fed Chairman Ben S. Bernanke said the economy
wasn’t growing fast enough to push unemployment lower.
“Further Fed stimulus is probably limited at this point,”
said John Silvia, chief economist at Wells Fargo Securities LLC
in Charlotte, North Carolina. “The drop in the unemployment
rate has to be very, very positive from the Fed’s point of
view.”
The contract on the Standard & Poor’s 500 Index expiring in
March rose 0.9 percent to 1,334.0 at 8:47 a.m. in New York. The
yield on the benchmark 10-year Treasury note climbed to 1.91
percent from 1.82 percent late yesterday.
The median projection in the Bloomberg survey called for a
rise of 140,000 payrolls after an initially reported 200,000
gain in December. Estimates of the 89 economists ranged from
increases of 95,000 to 225,000. Revisions added a total of
60,000 jobs to payrolls in November and December. The Labor
Department revised December’s gain to 203,000.
Broad-Based Gains
The gains in employment were broad-based, including
manufacturing, construction, temporary help agencies, accounting
firms, restaurants and retailers. The number of industries
showing job gains climbed to 64.1 in January from 62.4 a month
earlier.
Factory workers put in an average 41.9 hours of work each
week, the most since January 1998, while overtime hours climbed
to the highest since March 2007. Manufacturing payrolls
increased by 50,000 in January, the most in a year.
The unemployment rate, derived from a separate survey of
households, was forecast to hold at 8.5 percent, according to
the survey median. The drop in the jobless rate reflected a
381,000 decrease in unemployment at the same time 250,000
Americans entered the labor force.
Private Payrolls
Private payrolls, which exclude government agencies, rose
257,000 in January after a revised gain of 220,000 the prior
month, marking the biggest back-to-back gain since March-April.
It was projected to climb by 160,000.
Peoria, Illinois-based Caterpillar Inc. (CAT), the world’s
biggest maker of earthmoving equipment, plans to increase
employment this year as it expands facilities, including in
Victoria, Texas, and Winston-Salem, North Carolina, Chief
Financial Officer Edward Rapp said yesterday.
“Those are the things that will lead to employment growth
here,” Rapp said in an interview with Betty Liu on Bloomberg
Television’s “In the Loop.”
Employment at service-providers increased 162,000, the most
in four months and reflecting faster job gains in retail,
transportation and leisure and hospitality.
Tibco Software Inc. (TIBX) plans to hire 500 people in the U.S.
this year as the economy improves and Europe works out its debt
crisis, Vivek Ranadive, chief executive officer of the Palo
Alto, California-based company said in an interview.
Hiring ‘Rapidly’
“We are hiring quite rapidly now, all in sales and
service,” Ranadive said last week at the World Economic Forum’s
annual conference in Davos, Switzerland. “It’s a good time to
hire.”
Construction companies added 21,000 workers last month.
Government payrolls decreased by 14,000 in January, reflecting
cuts at the federal and local levels.
Average hourly earnings rose 0.2 percent to $23.29, today’s
report showed. The average work week for all workers held at
34.5 hours.
The so-called underemployment rate -- which includes part-
time workers who’d prefer a full-time position and people who
want work but have given up looking -- decreased to 15.1 percent
from 15.2 percent.
The Fed said on Jan. 25 after a two-day meeting that it
would keep its benchmark lending rate low “at least” until
late 2014 from a prior target of mid-2013.
Bernanke on Employment
“We still have a long way to go before the labor market
can be said to be operating normally,” Bernanke told the House
Budget Committee in Washington yesterday. “Fortunately, over
the past few months, indicators of spending, production and job-
market activity have shown some signs of improvement.”
With today’s jobs report, the government issued its annual
benchmark update, aligning the data with corporate tax records
covering the period from April 2010 to March 2011. The Labor
Department added 165,000 to the job count over the period.
The report also included methodology changes to the
household survey, incorporating new population data from the
decennial census, according to the Labor Department.
It also included changes to the figures used to adjust the
data for seasonal swings affecting numbers back to January 2007.
To contact the reporter on this story:
Bob Willis in Washington at
[url=mailto:bwillis@bloomberg.net]bwillis@bloomberg.net[/url]
To contact the editor responsible for this story:
Christopher Wellisz in Washington at
[url=mailto:cwellisz@bloomberg.net]cwellisz@bloomberg.net[/url]
http://www.bloomberg.com/news/2012-02-03/payrolls-in-u-s-jumped-243-000-in-january-unemployment-rate-drops-to-8-3-.html


Added: Feb-3-2012 
By: ElegantDecline
In:
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Tags: US, Back, On, Feet, Sour, Grapes, Republicans
Location: Washington, District of Columbia, United States (load item map)
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