Economy adds 157K jobs, unemployment hits 7.9%
Applicants wait to meet potential employers at a Manhattan job fair on Jan. 17, 2013 in New York City. / Mario Tama/Getty Images
WASHINGTON U.S. employers added 157,000 jobs in January and hiring was stronger over the past two years than previously thought, providing reassurance that the job market held steady while economic growth sputtered.
The mostly upbeat Labor Department report Friday included one negative sign: The unemployment rate rose to 7.9 percent from 7.8 percent in December. The unemployment rate is calculated from a survey of households, while job gains come from a survey of employers.
The hiring picture over the past two years looked better after the department's annual revisions. Those showed employers added an average of roughly 180,000 jobs per month in 2012 and 2011, up from previous estimates of about 150,000. And hiring was stronger at the end of last year, averaging 200,000 new jobs in the final three months.
Stock futures rose after the report was released.
One notable change in the job market is the stronger contribution from construction firms. They added 28,000 jobs in January and nearly 100,000 in the past four months. The gains are consistent with a rebound in home construction and a broader recovery in housing.
Last month's hiring should cushion the impact of the higher Social Security taxes that most consumers are paying this year. And it would help the economy resume growing after it shrank at an annual rate of 0.1 percent in the October-December quarter.
Higher Social Security taxes are reducing take-home pay for most Americans. A person earning $50,000 a year will have about $1,000 less to spend in 2013. A household with two high-paid workers will have up to $4,500 less. Taxes rose after a 2 percent cut, in place for two years, expired Jan. 1.
Analysts expect the Social Security tax increase to shave about a half-point off economic growth in 2013, since consumers drive about 70 percent of economic activity.
The hit to consumers is coming at a precarious moment for the economy. It contracted in the fourth quarter for the first time in 3 1/2 years. The decline was driven largely by a steep cut in defense spending and a drop in exports. Analysts generally think those factors will prove temporary and that the economy will resume growing.
Still, the contraction last quarter points to what are likely to be key challenges for the economy this year: the prospect of sharp government spending cuts and uncertainty over whether Congress will agree to raise the federal borrowing cap.
Most analysts predict that the economy will grow again in the January-March quarter, though likely at a lackluster annual rate of around 1 percent. They expect the economy to expand about 2 percent for the full year.
Two key drivers of growth improved last quarter: Consumer spending increased at a faster pace. And businesses invested more in equipment and software.
In addition, homebuilders are stepping up construction to meet rising demand. That could generate even more construction jobs.
And home prices are rising steadily. That tends to make Americans feel wealthier and more likely to spend. Housing could add as much as 1 percentage point to economic growth this year, some economists estimate.
Auto sales reached their highest level in five years in 2012 and are expected to keep growing this year. That's boosting production and hiring at U.S. automakers and their suppliers.
Editor's note: This Associated Press article was posted minutes after the Labor Department released the January employment report. It has since been replaced by a staff-written report. You can find the latest report and reader comments here.
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No matter what or who gets elected: Outsourcing or In-Sourcing! NOTHING! I Repeat NOTHING WILL EVER CHANGE when it comes to Americans being replaced with cheap cheap H-1B/L1 scabs.
Jobs are not just going overseas, they are going to H-1B/L1 Scabs who are from overseas.
It's not "We the People", It's the Business who runs this country now, and when it comes to getting cheap cheap labor, the business and all the rich are addicted to slave labor. They can't have enough.
Weather its the ReThugolCons or the DumORats, its all about flooding the US with the dirt poor from all over the world for cheap cheap slave labor. Americans are being replaced with scabs from all over the world in every state and industry.
The British Parasites (BP) plus Australians/Canadians scabs are getting ALL the media, movie, TV Ads and TV slots. (Ever seen any soccer on ESPN, NBC or Fox Soccer) All Americans have been replaced with the Very Crude Briti$hit scabs. The Treasonous Anglophile Americans have outsourced and In-sourced all our Hollywood jobs to the British Parasites (BP), Batman, Spiderman and many other American icons movies are all now made using the very crude British Parasites who all Hate everything American with passion, yes but they do love our green. And also please do remember that the DEAD LAST British Parasites (BP) have NEVER EVER WON Anything in soccer for over 35 to 40 Years at any age level yet they totally control all soccer on ESPN and *** Soccer. YEP! Look it up! What a Joke! LOL!
The Russians plus Eastern European Mafia are running massive Fraud schemes all over the US. From Gas Stations to every job at every Boardwalk all over the US, the summer jobs which use to go our youth. The Cheap Republic of Chinese junk and Millions of American Manufacturer Jobs which have been Exported and they (The Business owners) keep telling us that those American are not coming back. The Philippines are getting all the nursing jobs while all the American nurses are being laid-off and replaced.
The Indians are the largest influx; they are bent on total takeover by any means including any and all kinds of Fraud. The Indian have been used to replace more American in every industry then all the other countries combined with H-1B/L1 visas. The Indians also have the largest influx with Visa over-stayers and Anchor Babies. Just between 2003 to 2008 over 75 million Indian entered the US and never left.
The Irish also have a very large influx of Visa over-stayers and illegals mostly in the north-east. And yes we all know about the millions of illegals the from south and north of our borders. With over 30 years of open border and free pass to all business to do whatever they want, we are in the midst of becoming a third world just like all the cheap cheap labor we have allowed in.