WASHINGTON (AFX) - Total nonfarm payroll employment rose by 268,000 in January from December, the Labor Department said.
The unemployment rate rose to 4.2 pct in January compared with 4.0 pct in December. This is the highest unemployment rate since Sept 1999, and this is the biggest rise in the unemployment rate since April 1999.
The nonfarm payroll gain was notably stronger than expected, the rise in the unemployment rate was also higher than expectations. The consensus forecast of Wall Street economists was for total non-farm payrolls to rise by 54,000, and for the unemployment rate to rise to 4.1 pct.
This is the largest gain in nonfarm payrolls since April 2000. In December, total nonfarm payrolls rose a revised 19,000, weaker than the initial estimate of a rise of 105,000.
Hourly earnings were unchanged in January. The Wall Street consensus forecast was for a rise in hourly earnings of 0.3 pct. Year-on-year, hourly earning were up 3.9 pct year-on-year, this is down from 4.3 pct in December, but still below the peak of 4.4 pct in April 1998.
Payroll growth was stronger than expected in January because of "unusually large employment increases" in construction and federal government jobs, according to the Bureau of Labor Statistics. Construction jobs climbed 145,000 in January, influenced by relatively mild weather following "unusually severe" weather in the prior two months, said Katharine Abraham, Commissioner of the Bureau.
Government jobs jobs increased by 81,000 in January, on the back of an unusually large gain in postal workers, Abraham said. Usually the postal service has a big loss in jobs in January, thanks to layoffs following the holiday shipping season. However, this holiday season did not register the usual build-up, Abraham added.
Payrolls for the goods-producing sector rose by 85,000, Manufacturing jobs fell by 65,000 in January after falling a revised 56,000 in December, down from the initial estimate that job growth in the sector fell by 62,000. This is the biggest drop since August 2000.
The services-producing sector saw payrolls rise by 183,000 in January.
Retail jobs gained 27,000 in the month, but this was offset partially by a 5,000 decline in wholesale trade jobs.
In a separate household survey, the Labor Department said the number of unemployed persons rose by 303,000 to 5.96 mln in January. The civilian labor force rose by 466,000 to 141.96 mln, while total employment rose 163,000 to 136.0 mln.
The index of aggregate hours worked rose 0.9 pct in January to 151.8 hours.
The factory workweek rose by 30 minutes to 40.9 hours, "but this is only a partial rebound from the sharp drop in December," Abraham said. In December the factory work week dropped by 48 minutes, thanks to several severe snow storms curtailing manufacturing activity, Abraham added.
Overtime in the manufacturing sector rose by 12 minutes to 4.1 hours.
The average workweek rose by 24 minutes to 34.3 hours. Average weekly earnings increased by 0.6 pct to 480.89 usd, and were up 3.3 pct year-on-year.