United States: Labour market remains weak despite falling unemployment
February 4, 2011
In January, the economy added 36,000 jobs, after a revised increase of 121,000 in December (previously reported: +103,000 jobs). The January reading presented a mixed picture for private sector analysts, as the payrolls gain was below expectations but the unemployment rate actually fell from 9.4% in December to 9.0% - the lowest rate in 22 months. In fact, the drop in unemployment reflected a drop in the labour force, suggesting that job seekers remain discouraged to look for new work opportunities. The increase in jobs was driven by private sector hiring, as private non-farm payrolls increased by 50,000 units (December: +121,000 jobs). Meanwhile, the public sector cut 14,000 jobs in January, following the 18,000 jobs shed in December. The economy lost an accumulated 7.4 million jobs between December 2007 ? the official start of the recession ? and its official end in June 2009. The tentative economic recovery observed since then saw just 228 thousand jobs added, indicating that the labour market remains fragile.