The U.S. economy added 243,000 jobs in January, an unexpectedly high number that dropped the nation’s unemployment rate to a three-year low.
“Today’s employment report provides further evidence that the economy is continuing to heal from the worst economic downturn since the Great Depression. It is critical that we continue the economic policies that are helping us to dig our way out of the deep hole that was caused by the recession that began at the end of 2007,” said Alan Krueger, chairman of the White House Council of Economic Advisers. “Most importantly, we need to extend the payroll tax cut and continue to provide emergency unemployment benefits through the end of this year, and take the additional steps that President Obama proposed in his State of the Union address to create an economy built to last.”
Analysts had originally expected a gain of only 150,000 jobs. Instead, last month employers created the most jobs since April, dropping the unemployment rate to 8.3%, down from 8.5% the month prior. Since August, the joblessness rate has fallen by 0.8%.
Although, according to NACM Economist Chris Kuehl, PhD, job growth is a very difficult figure to track, other figures from the private sector mirror the optimism of the government’s latest report. “Here is the good news according to the latest survey from ADP,” said Kuehl, referring to ADP, Inc.’s most recent National Employment Report. “They are seeing gains in the private sector as far as hiring is concerned, and the majority of these new hires are with smaller companies. This is critical as small and medium-sized companies with employee numbers between 50 and 500 are the primary employers in the U.S.”
Kuehl noted that if this sector isn’t hiring, then the chances for a solid recovery in employment are slim. Luckily, this doesn’t seem to be the case. “It is even more interesting that ADP reports that many of those companies that are hiring are in the manufacturing sector,” he added. “That bolsters the assessment of manufacturing as a robust sector of the economy.”
“This is not the definitive signal that all is well and that real gains will soon be showing in the overall levels of joblessness, but this is a step in the right direction,” said Kuehl.
Jacob Barron, CICP, NACM staff writer