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US employers added 157k jobs last month

Friday, February 01 14:33:17

U.S. job growth grew modestly in January and gains in the prior two months were bigger than initially reported, supporting views the economy's sluggish recovery was on track despite a surprise contraction in output in the final three months of 2012.

Employers added 157,000 jobs to their payrolls last month, the Labor Department said today. There were 127,000 more jobs created in November and December than previously reported.

The unemployment rate, however, edged up 0.1 percentage point to 7.9 percent.

The closely watched report also showed an increase in hourly earnings and solid gains in construction and retail employment.

Coming on the heels of data on Wednesday showing a surprise contraction in gross domestic product in the fourth quarter, that should ease any worries the economy was at risk of recession, even though the unemployment rate ticked up.

GDP contracted at a 0.1 percent annual rate in the fourth quarter, largely because of a sharp slowdown in the pace of inventory accumulation and a plunge in defense spending.

A monster storm that hit the East Coast in late October also weighed on output, a drag that should lift this quarter.

Federal Reserve officials said on Wednesday that economic activity had "paused," but they signaled optimism the recovery would regain speed with continued monetary policy support. The Fed left in place a monthly $85 billion bond-buying stimulus plan.

Economists polled by Reuters had expected employers to add 160,000 jobs and the unemployment rate to hold steady at 7.8 percent last month.

The Labor Department also published benchmark revisions to payrolls data going back to 2008. It said the employment level in March 2012 was 422,000 higher on a seasonally adjusted basis than previously reported.

It also introduced new population factors for its survey of households from which the unemployment rate is calculated. This had a negligible effect on the major household survey measures. (C ) Reuters