Record January snow adds to cloudy US jobs market

Economic gridlock
© AFP/Getty Images/File Scott Olson

WASHINGTON (AFP) – US job creation slowed to a halt in January as winter storms gripped broad swaths of the country, according to official data published Friday.

The economy added a meager 36,000 jobs, the Labor Department said, an increase that was much smaller than the 148,000 expected.

But bad weather along with statistical adjustments clouded the data, offering Americans a contradictory snapshot of the still-weak jobs market.

A separate survey showed a sharp 0.4 percentage point drop in the unemployment, which fell to a 22-month low of 9.0 percent.

Economists said that was at least partly because hundreds of thousands of people disappeared from the statistics thanks to an annual population revision.

But according to Nigel Gault of IHS Global Insight, Friday’s news is positive, if a little opaque.

“The payroll details and the drop in unemployment signal that there is an underlying improvement in the labor market buried under the snow and ice,” he said.

The decline in the jobless rate “reflected more people finding jobs, not more people giving up and leaving the labor force,” he said.

But as job creation remained far below the 200,000-a-month level which experts say is needed to get employment back to where it was before the recession, the White House sounded a cautious tone.

President Barack Obama’s administration said unemployment was still painfully high as it vowed to put the government-supported recovery on a sustainable track.

“The 0.8 percentage point decline in the unemployment rate over the past two months is a welcome development; however, the rate remains unacceptably high,” White House chief economist Austan Goolsbee said in an official blog.

“The overall trend of economic data in recent months has been encouraging, as initiatives put in place by this administration are taking hold, but there is still considerable work to do.”

Since a low in February 2010, employment has increased by an average of 93,000 a month, leaving policymakers hesitant to let the economy stand on its own.

Federal Reserve chairman Ben Bernanke warned Wednesday the economy was still in “a deep hole” more than a year and a half after the Great Recession ended.

“Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established,” the central bank chief said at a rare news conference.

Details of Friday’s data appeared to show the jobs market was heading in the right direction, but at the wrong velocity.

The private sector added 50,000 jobs, offsetting the loss of 14,000 payrolls in the federal and state governments.

Jobs were added in manufacturing, a key engine of the recovery from recession, up 49,000, and in retail trade.

Sectors typically affected by inclement weather such as construction, shed 32,000 jobs.

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