The economy created jobs at the fastest pace in nine months in January and the unemployment rate dropped to a near three-year low of 8.3 per cent, indicating last quarter’s growth carried into early 2012.
Nonfarm payrolls jumped 243,000, the labour department said on Friday, the most since April and beating economists’ expectations for a gain of only 150,000.
Economists had expected the jobless rate to hold steady at 8.5 per cent. The rate has dropped 0.8 percentage point since August.
The decline last month reflected large gains in employment in the separate household survey from which the unemployment rate is derived. Fewer people left the labour force.
Job gains last month were widespread, with even the transportation and warehousing sector increasing payrolls.
The tenor of the report was further strengthened by revisions to November and December payrolls data, which showed 60,000 more jobs created than previously reported.
In addition, average hourly earnings rose four cents, which should help to support spending. The report suggested that expectations of a slowdown in US economic growth in the first quarter were not yet impacting on companies’ hiring decisions.
The continued labour market improvement could be a relief for President Barack Obama who faces a tough re-election.
The US Federal Reserve last week said it would probably hold interest rates near zero at least through 2014, citing still-high unemployment.
Chairman Ben Bernanke said the Fed was mulling further purchases to speed up the recovery, but the last employment numbers could cause policy makers to step back. The US central bank has already bought $2.3 trillion in bonds to keep rates low and spur the economy.
Employment in the private sector surged 257,000 - the largest gain since April. Government payrolls fell 14,000, the least amount since September.
Canada’s jobless rate rises to nine-month high
Canada’s unemployment rate rose to a nine-month high in January as the trend of sluggish job creation that began in the second half of last year continued.
The jobless rate rose to 7.6 per cent from 7.5 per cent as employment increased 2,300 last month, Statistics Canada said on Friday in Ottawa. Economists surveyed by Bloomberg News had forecast unemployment to stay at 7.5 per cent and 22,000 jobs to be added.
Consumers will account for more than half of Canada’s 2 per cent economic growth this year, according to the Bank of Canada, as weak global demand and a high dollar curb exports. Most of the past year’s job growth came in the first six months of that period, Statistics Canada said, which suggests consumer spending growth may be restrained.
The US economy grew at a 2.8 per cent annual rate in the final three months of 2011, quickening from 1.8 per cent in the third quarter. However, the rebuilding of stocks by businesses accounted for two-thirds of the rise, setting the economy up for a slower growth pace this quarter.
Growth is also seen moderating as the European debt crisis, which has already pushed some economies in the region into recession, takes an edge off US exports.
Still, there are signs that the economy continues to have momentum. Auto sales were buoyant in January, factory activity hit a seven-month high and the four-week average of new jobless claims fall through the month.
While job growth has quickened there are no jobs for three out of every four unemployed people and 19.3 million Americans are either out of work or underemployed.
But there is reason for cautious optimism. The unemployment rate has declined for five straight months, partly because of unemployed workers giving up the hunt for a job and people actually finding work.
A broad measure of unemployment, which includes people who want to work but have stopped looking and those working only part time but who want more work, slipped to 15.1 per cent in January from 15.2 per cent in December.
