Department of labour says 113,000 new jobs added in January, a second month of poor results and far short of forecasts
The department that deals with US unemployment fuelled fears that the country’s job market recovery could have stalled when it said the economy added only 113,000 new jobs in January.
Economists had been expecting around 180,000 new jobs, and this was the second month of disappointing jobs news from the department of labour, which last month surprised economists by saying that the US had added just 74,000 jobs in December, well below the 200,000 some had expected. That has been revised up to 75,000. Last year the economy added an average of 194,000 jobs per month.
Official figures show the number of unemployed was little changed in January, at 10.2m, with the unemployment rate down just 0.1% to 6.6%. The percentage of the population in or looking for work edged up to 63% from a three-decade low of 62.8% last month.
The number of long-term unemployed (those jobless for 27 weeks or more) fell by 232,000, but the figure was probably affected by the fact that a million Americans lost their extended federal unemployment benefits at the end of December. Even so, the figure remains high at 3.6m – making up 35.8% of the ranks of the unemployed.
But stockmarkets on both sides of the Atlantic shrugged off the news to send share values up as analysts partly blamed the weather and traders focused on expectations of further economic strength. The FTSE 100 climbed 13 points to 6,571 while the Dow Jones industrial average rose 105 points to 15,733.
Mark Zandi, chief economist of Moody’s Analytics, said: “Cold and stormy winter weather continued to weigh on the job numbers. Underlying job growth, abstracting from the weather, remains sturdy. Gains are broad-based across industries and company sizes, the biggest exception being manufacturing, which shed jobs – but that is not expected to continue.”
The jobs news comes against a background of steady improvement in many other areas of the US economy, pushing the annual rate of growth in the last three months of 2013 to 3.2%.
Britain’s outlook also improved after figures showed the trade deficit narrowed sharply in December, helped by rising exports to countries beyond Europe.
The boost to the UK’s trade position exceeded economists’ expectations and raised hopes that exports finally helped lift the overall economy at the end of last year after dragging on growth over the summer. But a rise in manufacturing output of 0.3% in December showed the sector failed to grow as fast as hoped.
The UK still has some way to go to squeeze its deficit to the level of France’s, which was €61bn in 2013, and both countries lie well behind Germany, which registered a €200bn surplus last year.
Analysts said the UK’s figures failed to support the government’s push to rebalance the economy away from consumer spending towards more manufacturing and exports.
The deficit on trade in goods and services fell to an estimated £1bn in December, compared with a gap of £3.6bn in November, giving an annual trade deficit of £108.3bn.
A fall in the number of insolvencies to an eight-year low in 2013 also cheered investors, though experts warned that already high levels of indebtedness could rise “in the not too distant future”.
The Insolvency Service said 101,000 people had become insolvent during the year, a fall of 7.9% on 2012’s figure.
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