(Reuters) – The economy created jobs at the fastest pace in nine months in January and the unemployment rate unexpectedly dropped to a near three-year low, giving a boost to President Barack Obama as campaigning heats up ahead of November elections.
Nonfarm payrolls jumped 243,000, the Labor Department said on Friday, as factory jobs grew by the most in a year. The jobless rate fell to 8.3 percent – the lowest since February 2009 – from 8.5 percent in December.
The gain in employment was the largest since April and it far outstripped the 150,000 predicted in a Reuters poll of economists. It could lessen the likelihood of further action from the Federal Reserve to spur a stronger recovery.
(SF Gate) – White House – The White House used the jobs report to bolster its argument for extensions of a payroll tax cut and unemployment benefits.
“It is critical that we continue the economic policies that are helping us to dig our way out of the deep hole that was caused by the recession that began at the end of 2007,” Alan Krueger, chairman of the White House Council of Economic Advisers, said in a statement.
Elsewhere, European retail sales unexpectedly declined in December, led by Germany and France, as unemployment at a 14- year high and government spending cuts sapped consumer demand.
Gains in employment last month were broad-based, including manufacturing, construction, temporary help agencies, accounting firms, restaurants and retailers.
Employment, overtime and hours worked in factories increased as manufacturers, who have been leading the two-year recovery, boosted production to rebuild inventories and meet global demand for their goods.