Economic Recovery Gets Boost from Positive Jobs Report

The January jobs report bodes well for the economic recovery, as the private sector added 243,000 jobs last month, the U.S. Bureau of Labor Statistics reported Friday. The unemployment rate decreased to 8.3 percent, the lowest level in three years.

Upon release of the report, Dow Jones industrial average futures surged 100 points. The Dow has gained 4 points since the beginning of the year, a signal that investors are showing confidence in the economic recovery.

The much-anticipated report follows news yesterday that first-time claims for unemployment decreased by 12,000, falling beneath 375,000, which economists consider the benchmark for sustained hiring that will lower the unemployment rate. 

Professional and business services showed the most robust employment gains (70,000), while leisure and hospitality added 44,000 jobs primarily in food services and drinking establishments. Since February 2010, food services has added 487,000 jobs. 

Manufacturing added 50,000 jobs, the most in a year, while retail continued its trend upward, with jobs gains in department stores, health and personal care stores and car dealers partially offset by losses in clothing and clothing accessory stores. Since a low point in December 2009, retail has added 390,000 jobs. Thanks in part to an unseasonably warm winter, construction, too, is showing signs of life adding 21,000 jobs

Government jobs remained flat, but over the past year, this sector has lost 276,000 jobs primarily in local and state government and the U.S. Postal Service.  

Among the worker groups, unemployment rates for adult men (7.7 percent) and blacks (13.6 percent) declined last month, while the rates for adult women (7.7 percent), teenagers (23 percent), whites (7 percent), and Hispanics (10.5 percent) were little changed.

While the job report was more positive than expected, there are 12.8 million people out of work.  But that figure is the fewest since the end of the recession. The number of “under-employed” persons working part-time because their hours had been cut back or because they were unable to find a full-time job, at 8.2 million, changed little from December. 

There are also an estimated three-million long-term unemployed people who have given up looking for work and are therefore not counted by the Labor Department. The nation has an estimated 5.6 million fewer jobs than it did when the recession began in late 2007.