Today’s employment report for January strikes yet another blow at the forces of pessimism emboldened by last week’s surprisingly weak fourth quarter economic news. Indeed, this week’s news on the economy has been generally upbeat, offering a sharp counterpoint to last Friday’s disappointing GDP release. But there’s a catch: the encouraging update on the employment front comes at an anxious time for inflation expectations, which are on the rise, or so the ongoing bull market in gold suggests.
Sticking with jobs for the moment, it’s a bit easier to be cheery about growth this morning. The Labor Department advises that the jobless rate last month fell to 4.7%, the lowest since July 2001. The economy created 193,000 new jobs in January, up from December’s relatively sluggish pace of 140,000. Although November’s revised sizzling pace of a 354,000 gain seems a world away, it’s nonetheless clear that the American economy’s ability to mint new employment opportunities is far from dead in 2006. Indeed, last month marks the 29th straight month of growth in new jobs. The previous stretch of unbroken gains was the 33 months through May 2000 (the run would have been 52 months had it not been for August 1997’s mild stumble, but we digress).
Adding to potency of January’s employment momentum is the fact that the rise was broadly dispersed. Even the perennially job-challenged manufacturing sector managed to eke out a gain of 7,000 new jobs last month. Only retail trade and government posted losses, albeit relatively slight ones at that.