Skip to main content

Unemployment Rate Dips to 9.7% in January

The U.S. economy lost 20,000 jobs in January, according to the Labor Department's nonfarm payrolls report. Consensus estimates called for payrolls to increase by 15,000, but forecasts varied widely ahead of the release.
  • Author:
  • Publish date:

Updated with commentary and further details from the report.



) -- Employers shed jobs at a slower pace in January, but the nation's unemployment rate edged lower, according to a government report released Friday.

Nonfarm payrolls dropped by 20,000 in January. Consensus estimates called for payrolls to increase by 15,000, according to, though individual forecasts varied widely ahead of the Bureau of Labor Statistics' release.

But in a surprise, the nation's unemployment rate, which is culled from a separate survey, edged down to 9.7%. That's the rate's lowest level since August. Economists had expected the headline rate to hold steady at 10%. In a further hint of recovery, the underemployment rate, which also includes part time and discouraged workers not looking for work, fell to 16.5% in January from 17.3% in the prior month.

"It's confirming what we thought before, which was a slow recovery with signs of gradual improvement," said Paul Ballew, chief economist for Nationwide Insurance. "The report is a mixed bag and we were expecting a mixed bag, but it tells us once again we have a weak labor market and we're looking at a protracted period of moderate growth, that's only starting on the margins."

Nonfarm payrolls lost 150,000 jobs in December, a downward revision after an original report held that 85,000 jobs were lost. But November payrolls were revised higher, showing employers added 64,000 jobs after originally reporting an increase of 4,000.

Some positive trends were made in a cross-section of industries. The manufacturing sector also added jobs for the first time in three years -- 11,000 jobs. The retail sector added 42,000. Temporary help services also hired 52,000. On the other hand, construction employment lost 75,000 jobs in January.

The federal government also added another 33,000 jobs, about 9,000 of which were due hiring in preparation for the 2010 Census.

The average hourly workweek also increased to 33.3 hours in January after hitting 33.2 in the prior month. Average hourly earnings also tracked higher by 0.3%, past expectations calling for a 0.2% rise.

But the stark nature of the nation's labor market struggles were made clearer today. After revisions, payrolls lost about 8.4 million jobs since December 2007, about 1 million more jobs shed than previously estimated.

And several recent layoff announcements from


(VZ) - Get Verizon Communications Inc. Report

Scroll to Continue

TheStreet Recommends



(WMT) - Get Walmart Inc. Report


Home Depot

(HD) - Get Home Depot, Inc. Report

were only adding to the more despairing sentiment.

On a brighter note,


(CSCO) - Get Cisco Systems, Inc. Report

CEO John Chambers said the tech bellwether will add as much as 3,000 jobs in the coming quarters, highlighting the rebounding economy.

The unemployment problem became even more stark last week when President Barack Obama made job creation a focal point of his administration in his

State of the Union address.

On Thursday, the


had its largest point loss since April, in part, because of wariness ahead of today's release. The Labor Department said initial jobless claims rose past expectations, climbing by 8,000 to 480,000 last week. The Dow was recently down 49 points, or 0.5%, to 9,954.

Written by Sung Moss in New York