US payrolls edge up and unemployment falls

City A.M. Reporter
US employment rose far less than expected in January, partly the result of severe snow storms across parts of the country – but unemployment fell to its lowest level since April 2009.

The increase in nonfarm payrolls reported by the Labor Department on Friday was a quarter of the 145,000 increase that economists had expected.

The government noted that severe weather could have affected construction payrolls, which dropped 32,000 last month. There were also large declines in the employment of couriers and messengers.

A department official also said 886,000 people in the separate household survey said they did not work in January because of severe weather.

"Weather did have an impact, construction was weak, below trend, and transportation and warehousing was also pretty soft and that could be affected by weather," said Sean Incremona, an economist at 4Cast in New York.

The modest jobs gains are at odds with other data for January, which had suggested employment growth was picking up and had raised hopes that the manufacturing-driven recovery was now spreading to other sectors of the economy.

Despite the small increase in payrolls, the jobless rate, which is calculated from a separate survey, fell to nine per cent from 9.4 per cent in December.

The decline is unlikely to discourage the Federal Reserve from completing its $600bn (£371bn) government bond-buying programme to support the economy.

The government revised November and December payrolls to show 40,000 more jobs created that previously estimated.

The payrolls data comes from a survey of businesses, while the jobless rate is determined by a survey of households. The January household survey also reflects population changes, which makes it difficult to determine why the jobless rate fell.