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Archive for Saturday, February 6, 2010

Jobless rate drops to 9.7% in January

Unemployment decline boosted by seasonal hires

February 6, 2010

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— The outlook for jobs became a bit less bleak with January’s unexpected decline in the unemployment rate, which fell to 9.7 percent from 10 percent.

Still, Friday’s unemployment report showed just how deep the job crisis remains: 8.4 million jobs vanished in the Great Recession. Economists say the nation would be lucky to get back 1.5 million jobs this year. And they say it will take at least three to four years for the job market to return to anything like normal.

The unemployment rate fell to its lowest level since August because a Labor Department survey of households found a sharp rise in the number of Americans with jobs. The survey found that 541,000 more Americans had jobs last month.

But those gains resulted from seasonal adjustments to the data. Without those adjustments, the data show fewer people had jobs last month.

Such adjustments are made each month and are especially large in January because of heavy seasonal changes in hiring, according to Tom Nardone, an assistant commissioner at the department’s Bureau of Labor Statistics.

A separate survey of businesses found that employers shed 20,000 jobs last month. That was worse than the 5,000 gain analysts expected.

The reports helped send stocks lower. The Dow Jones industrial average fell more than 100 points, falling below 10,000.

January’s report did offer hope that employers may start adding jobs soon. Excluding the beleaguered construction industry, the private sector as a whole added 63,000 positions.

John Silvia, chief economist at Wells Fargo, said the drop in the unemployment rate wasn’t a result of a shrinking labor force, which has held the rate down in previous months.

“It simply was, people found jobs,” he said. The report is “consistent with continued improvement in the labor market.”

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