Employers added fewer jobs than forecast in December and the unemployment rate dropped to 9.4 per cent, a sign a labour-market recovery will take time to develop.
Payrolls increased 103,000, compared with the median forecast of 150,000 in a Bloomberg News survey, Labor Department figures showed today in Washington. Employment the previous two months increased more than previously estimated. The jobless rate fell to the lowest level since May 2009, reflecting gains in jobs and fewer people in the labour force.
Faster job growth is needed to keep consumer spending accelerating and ensure the economic recovery becomes self- sustaining. Payrolls need to grow about double December’s pace to make further progress in lowering the jobless rate, one reason why Federal Reserve policy makers have reiterated they will stick to their plan for more monetary stimulus.
“Firms must ratchet up hiring before we can expect consistent trend growth for the economy,” Jeffrey Roach, chief economist at Horizon Investments in Charlotte, North Carolina, said before the report. “Slower job growth will weigh on consumer spending for the next few quarters.”
Stock-index futures fell after the report, with the March contract on the Standard & Poor’s 500 Index dropping 0.2 per cent to 1,267.8 at 8.33 am in New York. Treasuries were little changed at 3.40 per cent from late yesterday.
Construction payrolls declined by the most since May and professional and business services added the fewest number of jobs in five months.
