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U.S. Unemployment Rate Falls to 8.3%

Broad gains seen across private sector; manufacturing adds 50,000 jobs.

A newly released report from the U.S. Department of Labor showed total nonfarm payroll employment rose by 243,000 in January, lowering the unemployment rate down to 8.3 percent. Job growth was widespread in the private sector, with large employment gains in professional and business services, leisure and hospitality, and manufacturing.

Following are some highlights from the report:

In the goods-producing sector, manufacturing added 50,000 jobs. Nearly all of the increase occurred in durable goods manufacturing, with job growth in fabricated metal products (+11,000), machinery (+11,000),
and motor vehicles and parts (+8,000). Durable goods manufacturing has added 418,000 jobs over the past 2 years.

Employment in construction increased by 21,000 in January, following a gain of 31,000 in the previous month. Over the past two months, nonresidential specialty trade contractors added 30,000 jobs. Meanwhile, mining added 10,000 jobs in January, with most of the gain in support activities for mining (+8,000). Since a recent low in October 2009, mining employment has expanded by 172,000.

Professional and business services added 70,000 jobs in January, with nearly the increase occurring in employment services. Job gains also occurred in accounting and bookkeeping (+13,000) and in architectural and engineering services (+7,000).

Over the month, employment in leisure and hospitality increased by 44,000, primarily in food services and drinking places (+33,000). Since a recent low in February 2010, food services has added 487,000
jobs.

Wholesale trade employment increased by 14,000 over the month. Since a recent employment low in May 2010, wholesale trade has added 144,000 jobs. Likewise, employment in retail trade continued to trend up in January, with most job gains in this sector seen in department stores (+19,000), health and personal care stores (+7,000), and automobile dealers (+7,000). This was partially offset by losses in clothing and clothing accessory stores (-14,000). Since an employment trough in December 2009, retail trade has added 390,000
jobs.

Health care employment continued to grow in January, with 31,000 jobs added. Within the industry, hospitals and ambulatory care services each added 13,000 position.

“[January’s] employment report provides further evidence that the economy is continuing to heal from the worst economic downturn since the Great Depression,” said Alan B. Krueger, chairman of the Council of Economic Advisers. “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.”

At the same time, Krueger warned that the monthly employment and unemployment numbers can be volatile, and employment estimates can be subject to substantial revision. To that end, he advises not to read too much into any one monthly report. Nevertheless, he said, “the trend in job market indicators over recent months is an encouraging sign.”

The complete January unemployment report, which includes the Household Survey, is available online.

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