The nation's longest job slump since the Depression ended last month when U.S. employers hired enough new workers to boost total payrolls...
WASHINGTON — The nation’s longest job slump since the Depression ended last month when U.S. employers hired enough new workers to boost total payrolls above the level before the 2001 recession.
The nation’s unemployment rate fell to 5.2 percent in January — the lowest level since September 2001 — from 5.4 percent the prior month, the Labor Department reported yesterday.
However, job growth has slowed in recent months, and the unemployment rate dropped primarily because hundreds of thousands of people stopped working or looking for jobs, the data showed.
These and other details depict a labor market that continues to improve, but more slowly than in any post-recession period since the department began keeping records in 1939, economists said.
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“January was another month of soft payroll growth for the U.S. economy,” said Peter Kretzmer, senior economist at Bank of America. “This almost four-year period of no net job growth illustrates just how delayed and soft the rebound in employment has been in the current expansion.”
Stock prices rose after the report was released as many investors concluded that the pace of job growth was good enough to keep the economy growing, but not so fast that it would prompt the Federal Reserve to raise interest rates more aggressively to squelch inflationary pressures.
Retailers, financial firms, hospitals, educators and other employers expanded their work forces while manufacturers shrank theirs for a fifth straight month. Combined, they added 146,000 nonfarm payroll jobs in January, after seasonal adjustment, the Labor Department reported yesterday.
That gain pushed the number of U.S. nonfarm payroll jobs to 132.6 million — slightly higher than the 132.5 million on the books in February 2001 at the high-point before the recession, according to the figures released yesterday, which included revisions of employment data back through 2000.
That meant the nation had recouped the more than 2.7 million jobs that employers cut during the recession and for more than a year afterward.
The 47 months it took — from February 2001 through last month — was more than twice as long as the average 21 months it has taken to return to a pre-recession job peak, according to an analysis of the data by the Economic Policy Institute, a think tank in Washington, D.C., that focuses on labor issues.
President Bush hailed the January employment report, which thwarted Democrats’ predictions last year that he would be the first president since Herbert Hoover to end his term with a net national job loss.
The January jobs gain was around the level economists believe necessary enough to keep pace with population growth. But it brought the average increase for the past three months to just 137,000 — a slowdown from the 181,000 per month average of last year.
Meanwhile, other signs of weakness were apparent, economists said.
The average workweek for production or nonsupervisory workers on private payrolls declined by 6 minutes to 33.7 hours. That caused average weekly earnings to fall as well, by 57 cents to $535.16.
Because employers typically extend their workers’ hours as business picks up, the decline “suggests that a rapid improvement in the labor market is unlikely in the near future,” said Drew Matus, of Lehman Brothers Global Economics.
More than 200,000 people dropped out of the labor force last month — which means they stopped working or actively looking for a job. That caused the share of the eligible adult population participating in the labor force to fall to 65.8 percent, the lowest level since May 1988. The portion has fallen since peaking at 67.3 percent in early 2000, at the height of the economic boom that preceded the recession.
Nearly 5 million nonworking adults say they want a job and are available to work now, but have stopped looking for various reasons, including discouragement over job prospects, the Labor report shows.
The unemployment rate for white workers dipped to 4.4 percent in January from 4.6 percent in December; the rate for blacks remained more than twice as high, slipping from to 10.6 percent from 10.8 percent; the Latino rate fell to 6.1 percent from 6.6 percent.
“Job conditions are mixed,” wrote Jared Bernstein, senior economist at the Economic Policy Institute. “The recovery is well under way, but it has yet to reach many working families.”