job growth seen snapping back from winter chill
By Lucia Mutikani

WASHINGTON -- U.S. employment likely rebounded in January after being held back by cold weather the prior month, which would offer assurance that economic growth wasn't faltering.

Nonfarm payrolls are expected to have increased by 185,000 last month, according to a Reuters survey of economists, with the jobless rate seen holding at a five-year low of 6.7 percent. Economists also expect December's paltry count of 74,000 net new jobs, viewed by many as an anomaly, to be raised sharply.

"We are far from having a booming economy, but we are growing increasingly confident that the economy is developing enough internal momentum to reach take-off velocity," said Bill Hampel, chief economist at the Credit Union National Association in Washington.

A report Monday showing a surprise drop in factory activity to an eight-month low in January spooked investors and fanned fears of a rapid cooling off in growth after the economy's robust performance in the second half of 2013.

But a reading on the dominant services sector Wednesday showed a fairly strong expansion in activity in January.

The monthly jobs report, always closely watched by financial markets around the globe,
will serve as a tie breaker. The Labor Department will release the data at 8:30 a.m. Eastern time.

While economists anticipate the labor market fared much better last month, relentless freezing temperatures present a wild card.

"If we get another low, disappointing number, it will change the short-term economic outlook," said Keith Hall, a senior scholar at Mercatus Center at George Mason University in Arlington, Va.

A brightening growth picture encouraged the Federal Reserve last month to move forward with a scaling back of its bond-buying stimulus. Officials at the U.S. central bank will be anxious to see payrolls snapping back from their weather-depressed December level.

While the unemployment rate is forecast holding steady, there is a risk it could decline even further in January because jobless benefits for more than one million long-term unemployed Americans expired at the end of December. If they have since given up the search for work, they wouldn't be considered as being in the labor market and unemployed.

Another Drop in the Jobless Rate

"If some long-term unemployed give up looking for work when their benefits run out, we could see another drop in the labor force participation rate," said Hall, a former commissioner of the Bureau of Labor Statistics.

"Conversely, people who lost their benefits might be forced to take a less desirable job, moving them from unemployed to underemployed."

The participation rate, or the proportion of working-age Americans who have a job or are looking for one, fell 0.2 percentage point to 62.8 percent in December, returning to the more than 35-year low hit in October.

A further decline could depress the unemployment rate, which is already flirting with the 6.5 percent level that Fed officials have said would trigger discussions over when to raise benchmark interest rates from near zero.

But policymakers have made it clear that rates won't rise any time soon even if the unemployment threshold is breached.

"The Fed will start to stress other measures of labor market slack in their guidance on when they are going to raise interest rates," said Ryan Sweet, a senior economist at Moody's Analytics in West Chester, Pa

The unemployment rate tumbled 0.3 percentage point in December, taking the drop in 2013 to 1.2 percentage points. Friday's report will include revisions to data on payrolls, the workweek and earnings going back to 2009.

The government said last year that the revisions to this data, which is drawn from a survey of employers, would likely show that 345,000 more jobs than previously thought were created in the 12 months through March 2013.

The report will also incorporate new population estimates. This means the employment and labor force figures that are derived from the government's survey of households won't be comparable to December.

The private sector is expected to account for all the hiring in January. Government payrolls are seen holding steady. Manufacturing employment likely rose for a sixth month, while hiring in the retail sector probably slowed after strong increases in the prior months.

While most economists think construction payrolls bounced back after being depressed by the weather in December, frigid temperatures last month may have pushed them down again.

Average hourly earnings likely rose by 0.2 percent after edging up 0.1 percent in December. The length of the workweek is seen steady at an average of 34.4 hours.

Increase your money and finance knowledge from home

Asset Allocation

Learn the most important step in structuring an investment portfolio.

View Course »

Professional Vs Do it Yourself Investing

Should you get advice or DYI?

View Course »

Add a Comment

*0 / 3000 Character Maximum


Filter by:

This is not unexpected.
AOL has sold out COMPLETELY to huffpost.
They now use huffpost spin meisters.

They've also sold out to obama.

It's time to look for another ISP.

February 10 2014 at 1:20 AM Report abuse rate up rate down Reply

Very biased headline and article.
Also the #'s came in at 130,000 - way less.
Article out of date, but the uninformed will tout it as
a democratic victory.
Actual employment #'s at late 70's levels.
Millions have just dropped off and stopped looking.

February 09 2014 at 10:06 AM Report abuse +1 rate up rate down Reply

Wow. More bad news. But with spin, it can fool a lot of people. As an added bonus, those who know this is bad, like the talking business heads on TV and radio, don't even tell you why its bad. Unemployment rate of 6.7%, really, how can that be? Well its with accounting through the white house, who under this administration, put those who come up with that number under administration control. Lets just look at a couple of facts: Our nation needs 150,000 -200,000 jobs per month just to employ those entering the work force for the very first time. If more than that number are hired, we are now addressing those who are unemployed and looking for work, and unemployment could really go down. But, the jobs created under this economy are ones in which low wages are paid, part time hours are implemented (due to Obama's deliberate economic plan for this nation), and more and more people are struggling. What we have is millions of fewer people working in this nation than there was when Obama took office, yet to hear the news, you would think that jobs are being created, each and every month. With less people working, more on government welfare ( I'm not talking of those that collect social security that are of age, or those on Medicare), the remaining workers must pay more in taxes. This of course means less money to spend consuming, which creates a large percentage of the jobs. This slows the economy further. Just while this has been happening (for the last 5 years), we have seen commodity and stock markets soar, making consumers spend more for everything, with their ever decreasing incomes. Add obamacare to the mix, and that's even more money coming out of those working in the form of taxes and growing government debt. Why is this happening? It's not a mistake, its by design. Its the White House's economic plan, and it is working today, just as planned. Why are the markets soaring, that would be the Obama "stimulus", where the big banks in essence are given that 85 Billion a month, supposedly down to 75 Billion, so that instead of lending money at low rates, they instead "invest" it in the markets, for their own selfish interests. Its Obama that is making the nation more dependent on government, and Obama that gives the big bucks out to support the banking industry, and Obama, along with the democrats, that gave you obamacare. These actions are the opposite of what Ronald Reagan did, and will have the opposite, (although desired) affect on this nation. Namely that we will have a downward slide in our standard of living overall, and improvement to one's own situation down the road becomes dimmer. But Obama and the media will have many believe things are getting better, and even Obama will tell you things are better, because he will give you his numbers to prove it. But much of America knows better, either first hand, or by those in their family. This must be stopped, elections are coming.

February 07 2014 at 5:57 PM Report abuse +1 rate up rate down Reply

Wasn't the Polar Vortex in January. Next

February 07 2014 at 8:33 AM Report abuse rate up rate down Reply

how many private sector employees are needed to pay for one public sector employee? think about it.

February 07 2014 at 8:23 AM Report abuse rate up rate down Reply

Blame it on the weather.

That shows us how bad things really are.

And unemployment at 6.5%?

No one believes that.

February 07 2014 at 6:13 AM Report abuse +7 rate up rate down Reply