U.S. Economy Adds Fewer Than Expected Jobs In January
Friday, February 02, 2007 8:54:03 AM - Friday morning, the Department of Labor released its closely watched report on the employment situation in the month of January, showing that the U.S. economy added fewer jobs than economists had been expecting.
The report showed that non-farm payroll employment rose by 111,000 in January following an upwardly revised increase of 206,000 in December. Economists had expected payrolls to increase by 150,000 compared to the increase of 167,000 originally reported for the previous month.
The Labor Department said that the job growth was largely due to a continued increase in jobs in service-providing industries, which added 104,000 jobs in January following an increase of 209,000 in December.
The growth in service jobs reflected notable increases in jobs in the education and health services, professional and business services, and leisure and hospitality industries.
However, the report also showed a continued decline in manufacturing jobs, which fell by 16,000 in January after falling by 18,000 in December. A decrease of 23,000 jobs in the motor vehicles and parts industry contributed to the drop in manufacturing jobs.
Additionally, the Labor Department said that the unemployment rate edged up to 4.6 percent in January from 4.5 percent in the previous month. The increase came as a surprise to economists, who had expected the unemployment rate to remain unchanged.
The higher unemployment rate was partly due to an increase in the size of the labor force, although the number of people that were unemployed also rose.
The report also showed that employees’ average hourly earnings rose $0.03 or 0.2 percent to $17.09 in January. Economists had been expecting a slightly larger increase in wages of about 0.3 percent. With the increase, wages were up 4 percent compared to January of 2006.