Retail sector leads job surge

? The nation’s unemployment rate unexpectedly dropped to 5.7 percent in January as businesses added 143,000 new jobs, a shot of good news for an ailing economy.

The increase in payroll jobs, mostly in retail, was the largest since November 2000, according to a Friday report by the Labor Department. The overall rate dropped by 0.3 percentage point from December’s 6 percent rate that matched an 8-year high.

Analysts had expected the unemployment rate to hold steady for a third straight month, with a more modest increase in payrolls. They cautioned that January’s report was unusual and may not reflect a true snapshot of the jobs market.

“Let’s enjoy the good news while we can,” said Joel Naroff, president and chief economist of Naroff Economic Advisors. “But I don’t think we will see the large job gain posted in January repeated.”

In the report, the surge in new jobs was concentrated in stores, restaurants and bars last month, which added 101,000 new positions. Economists had predicted that retail hiring would pick up because holiday employment was well below normal. This meant that fewer seasonal workers were laid off in January.

The job growth marks a major improvement over December, when businesses cut 156,000 jobs, according to revised figures.

Another factor contributing to the positive report was a change in the way the Labor Department compiles its survey of households, which is used to calculate the unemployment rate. Analysts included new questions about race and Hispanic ethnicity, added new job classifications and made other changes.

Labor Department officials said the changes likely had a small impact on compilation of the overall unemployment rate.

Economists cautioned against reading too much good news into January’s report because of the seasonal hiring adjustment and the government’s survey revisions.

“It’s difficult to make strict comparisons with previous numbers,” said Lynn Reaser, chief economist with Banc of America Capital Management Inc. “The good news is the jobs market is not deteriorating further.”