Friday, February 04, 2011

Weather Hurt U.S. Job Growth in January

The United States labor market slowed to a crawl in January, adding just 36,000 jobs last month, far below consensus market forecasts.

With 13.9 million people still out of work, the unemployment rate actually fell to 9 percent.

The disappointing jobs number, restrained by the January snowstorms and government layoffs, was far below what economists generally say is needed to merely keep pace with normal growth.

“We’re not creating jobs as fast as you’d like to see to sustain an economic virtual circle,” the chief economist at OppenheimerFunds, Jerry Webman, said.

Private companies added 50,000 jobs, while federal, state and local governments actually shed 14,000 jobs.

The job figures came in a week when several other indicators pointed toward an accelerating recovery. A closely watched survey of purchasing managers rose to its highest level since May 2004, and chain store sales increased at a faster pace than expected in January.

For the unemployed, the slow addition of jobs is growing increasingly frustrating. “If you want to get there and you’re sitting in an airplane, the fact that the airplane is moving 20 miles faster down the runway doesn’t matter to you,” said Cliff Waldman, economist at the Manufacturers Alliance/MAPI, a trade group. “You want it to take off.”

The Labor Department’s monthly snapshot of the job market also included its annual “benchmark revisions,” which suggested that job growth during 2010 was actually lower than originally reported.

Economists noted that job growth would not truly hit the kinds of levels needed to seriously dent the unemployment rate until employers beyond a handful of industries started hiring in earnest. Construction, which was among the hardest hit during the recession, has also not revived.

“It’s very brutal in our industry,” said Brantley Barrow, chairman of Hardin Construction, a builder of office buildings, malls and hotels based in Atlanta. “Even though the general economy is getting better, it’s going to be another year or two before things start to improve in our industry.”

The numbers underscored the assessment of the Federal Reserve chairman, Ben S. Bernanke, who said on Thursday that “until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established.”

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