Friday, February 06, 2004

The Wecovery 


The U.S. economy created just 112,000 new jobs in January, far fewer than expected, government data showed on Friday in a disappointing report that will likely weigh on President Bush's re-election campaign.

The fifth straight monthly gain in payrolls outside the farming sector was the largest since December 2000, the Labor Department said. However, its report still showed weak hiring 26 months after the economy climbed out of recession.

"The payrolls number was well below market expectations and confirms the jobs market in the U.S. is weak,," said Daniel Tenengauzer, vice president for foreign exchange at Lehman Brothers.

Analysts had been expecting the economy, which has been showing strength in areas outside the jobs market, to add 150,000 new jobs in January after an originally reported gain of only 1,000 the previous month. The department revised the December figure to an increase of 16,000.

Economists say the United States needs to add 150,000 jobs a month just to keep pace with growth in the labor force and to keep the unemployment rate steady. Since September, only 366,000 jobs have been added, or just over 70,000 a month.

"This is the weakest job creation rate relative to economic growth on record," said Steven Wood, an economist at Insight Economics.

Great job, George.

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