According to the US Department of Labor (DoL), the new year started with a 5.7% jobless rate – down from December’s 6% – and the lowest level since September.
The new job creation pace, fueled by a robust retail sector hiring, was the fastest in more than two years and followed the 156,000-job loss in December (See December Jobless Rate Steady; Economy Losing Jobs ).
Retail trade employment rose by 101,000 over the month, after seasonal adjustment; this increase followed a drop of 99,000 in December. Construction employment increased by 21,000 in January. The job-creation number greatly surprised economists participating in regular Reuters polls. The economists had predicted only 70,000 new jobs and forecast that the unemployment rate would stick at the 6% mark.
The DoL announced Thursday that the number of people applying for jobless benefits fell by 11,000 (See Jobless Claims Still Stuck Around 400,000 Mark ).
Many economists believe that a cloud of uncertainty caused by the threat of a US war with Iraq is making business owners and investors nervous about putting any more money into the market. That, in turn, has left the economy’s job-creation machine still largely moribund.