American employers added 157,000 jobs in January compared with a revised 196,000 jobs the previous month, the Labor Department reported on Friday. The unemployment rate was little changed at 7.9 percent, about where it has been stuck since September.
Job applicants at a job fair at Marlins Park in Miami last month.
On the bright side, revised government data showed that the economy added 335,000 more jobs than originally estimated during all of 2012, including an additional 150,000 in the last quarter of the year. That was on top of the previously reported fourth-quarter job growth of 603,000 and 2012 growth of 2.2 million.
The higher revisions, in particular, encouraged traders on Wall Street, sending the Dow Jones industrial average over the 14,000-point mark for the first time since 2007.
Still, job growth has been modest compared with previous recoveries, and economists saw little in January's report to suggest that hiring would pick up soon.
"I think it's going to be a tough slog here," said Joshua Shapiro, chief United States economist for MFR Inc. "There are plenty of headwinds out there for the economy. The cost of hiring somebody is great, with benefit costs and everything, and unless companies really absolutely need someone, they're not going to hire."
Construction has been one of the more encouraging sectors, adding jobs each of the last four months. The hiring there was probably because of a combination of rebuilding from Hurricane Sandy, unseasonably warm weather that led to fewer work stoppages, and the nascent housing recovery, said Ian Shepherdson, chief economist at Pantheon Macroeconomic Advisors.
Retailing, health care and the wholesale trade also added positions in January, while the government again shed jobs. Government payrolls have been shrinking most months over the last four years.
The January jobs numbers were close to what economists had forecast, although many had hoped for an upside surprise. Recent weeks have brought a slew of gloomy economic data, showing that the nation's output unexpectedly shrank at the end of 2012 and that consumers were becoming increasingly pessimistic about their finances and job prospects.
Dysfunction in Washington over the budget and higher tax rates that kicked in last month could further dampen consumer confidence and hiring early this year.
"The combination of eliminating the payroll-tax forgiveness along with continued stagnation in wages, I think, could be a real hit in terms of jobs," said Christine Owens, executive director at the National Employment Law Project, a labor advocacy and research group. "If you add in sequestration" -- the across-the-board cuts to federal spending currently scheduled for March 1 -- "that paints a pretty bleak picture."
Friday's report was "a reminder of the importance of the need for Congress to act to avoid self-inflicted wounds to the economy," Alan B. Krueger, the chairman of President Obama's Council of Economic Advisers, said in a statement.
Source: The New York Times | CATHERINE RAMPELL