Business | Economy
US jobless rate falls to 8.3% with 243,000 jobs
Payrolls jump the biggest since April and unemployment figures the lowest since February 2009
- Bloomberg
- Published: 00:00 February 4, 2012
Washington: Employment climbed more than forecast in January and the US jobless rate unexpectedly fell to the lowest in three years, casting doubt on the Federal Reserve's pledge to keep interest rates low until late 2014.
The 243,000 increase in payrolls was the most since April and exceeded all forecasts in a Bloomberg News survey, Labour Department figures showed in Washington. The unemployment rate dropped to 8.3 per cent, the lowest since February 2009.
Stocks and bond yields jumped as the report fuelled optimism the economy is weathering the European debt crisis. The data may boost President Barack Obama's re-election bid and come one week after Fed chairman Ben Bernanke said the economy wasn't growing fast enough to push unemployment lower.
"Further Fed stimulus is probably limited at this point," said John Silvia, chief economist at Wells Fargo Securities in Charlotte, North Carolina. "The drop in the unemployment rate has to be very, very positive from the Fed's point of view."
The median projection in the Bloomberg survey called for payrolls to rise by 140,000 after an initially reported 200,000 gain in December. Estimates of the 89 economists ranged from increases of 95,000 to 225,000. Revisions added a total of 60,000 jobs to payrolls in November and December. The Labour Department revised December's gain to 203,000.
Broad-based gains
Employment gains were broad-based, including manufacturing, construction, temporary help agencies, accounting firms, restaurants and retailers.
Employment, overtime and hours worked in factories increased as manufacturers, who have been leading the two-year recovery, ramped up production to rebuild inventories and meet global demand for their goods.
More working hours
Assembly-line workers put in an average 41.9 hours of work each week, the most since January 1998, while overtime hours climbed to the highest since March 2007. Manufacturing payrolls increased by 50,000 in January, the most in a year.
The unemployment rate, derived from a separate survey of households, was forecast to hold at 8.5 per cent, according to the survey median. The drop in the jobless rate reflected a 381,000 decrease in unemployment at the same time 250,000 Americans entered the labour force.
Private payrolls, which exclude government agencies, rose 257,000 in January after a revised gain of 220,000 the prior month, marking the biggest back-to-back gain since March-April. It was projected to climb by 160,000.
Federal cuts
Employment at service-providers increased 162,000, the most in four months.
Construction companies added 21,000 workers last month. Government payrolls decreased by 14,000 in January, reflecting cuts at the federal and local levels.
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