WASHINGTON (Reuters) - Job creation is accelerating throughout the economy, giving President Barack Obama’s reelection bid a boost and increasing the chances the jobless rate could improve faster than the Federal Reserve expects.
U.S. nonfarm employers added 243,000 jobs to payrolls last month, the government said on Friday. That was well above expectations and the gains were distributed broadly across the economy, from manufacturing to retail and construction.
Also, the jobless rate posted a surprise fall to 8.3 percent, its lowest since February 2009.
Following are some key details from the report:
* Job creation is spreading more widely into different sectors of the economy. The “diffusion index” for private payrolls jumped to 64.1 in January from 62.4 in December. That’s the highest reading since April 2011. A reading above 50 means more industries are increasing employment than decreasing employment.
* The improvement in the jobs market was evident in both the
employer and household surveys. The jobless rate fell as the household survey showed employment surging by 631,000, even after taking into account yearly adjustments to population counts that are done every January. That far outweighed the loss of 75,000 people from the workforce, which included people retiring as well as discouraged workers giving up on the job hunt. The household survey tends to be more volatile than the payroll survey, which is more closely watched by economists.
* Still, the drop in the jobless rate to 8.3 percent leaves unemployment closer to the bottom end of the central forecast range made by Fed policymakers for this year. That could strengthen the argument of inflation-fearing hawks within the Fed that the central bank should not embrace new measures to boost the economy too quickly. The Fed said last week the unemployment rate would end this year between 8.2 percent and 8.5 percent. However, the rate remains well above policymakers’ views for full employment.
* The January report can be tricky because of the Labor Department’s adjustments to population counts, which makes it harder to make apples-to-apples comparisons for the household survey. But even adjusting for these changes, the government said the participation rate, a ratio of the amount of the population in the labor force, was unchanged. That makes the drop in the unemployment rate all the more positive.
* Employers laid off only 1,500 couriers and messengers during the month, confounding expectations the number of jobs in that category would decline much more sharply during the month. Analysts had speculated government statisticians were having trouble seasonally adjusting courier jobs because consumers might be shopping more online than in previous years.
* Sticking to a trend that has emerged since the economic recovery began in 2009 following a deep recession, the Labor Department revised upward its estimate for payrolls during previous months. Some 60,000 more jobs were created during November and December than initially estimated.
* The aggregate weekly hours index - a measure of the total work effort - climbed 0.2 percent from a month earlier.
* Factories added 50,000 workers to payrolls, a one-year high that was much more than expected and shows U.S. manufacturers are still a key support for global production.
* Also, retailers added 10,500 workers and construction employment gained by 21,000. It is possible that the mild U.S. winter boosted employment in those sectors last month.
Reporting by Jason Lange; Editing by Neil Stempleman