Unemployment Rate Drops to 8.3 Percent

(NewsCore) - The US labor market grew at its most robust pace since last spring in January, a sign that the economy's momentum carried into the new year.

Nonfarm payrolls rose by 243,000 last month, the Labor Department said Friday, marking the biggest gain since last April. The jobless rate fell by two-tenths of a point to 8.3 percent, the lowest level since February 2009.

Both figures contradicted expectations of a slowdown in job growth to start the year. Economists surveyed by Dow Jones Newswires forecast a gain of 125,000 in payrolls and for the jobless rate to remain at 8.5 percent.

US stocks jumped on the data, with the Dow Jones Industrial Average advancing 106.07 points to 12,811.48 at the open. The S&P 500 Index rose 11.97 points to 1,337.64, while the Nasdaq Composite added 27.81 points to 2,887.49.

The Labor Department report also indicated that job growth was stronger in previous months than initially reported, with the economy gaining 60,000 jobs beyond the government's preliminary figures for November and December.

The latest drop in the jobless rate -- which has fallen from 9.1 percent since August -- was due largely to genuine job growth rather than a reduction in the labor force, the report showed. The number of unemployed people fell to 12.8 million, a three-year low.

The White House hailed the positive data Friday, with the chairman of President Barack Obama's Council of Economic Advisers, Alan B. Krueger, calling it "further evidence that the economy is continuing to heal from the worst economic downturn since the Great Depression."

"It is critical that we continue the economic policies that are helping us to dig our way out of the deep hole that was caused by the recession that began at the end of 2007," Krueger added. "Most importantly, we need to extend the payroll tax cut and continue to provide emergency unemployment benefits through the end of this year and take the additional steps that President Obama proposed in his State of the Union address to create an economy built to last."

However, he cautioned that the country still needs "faster growth to put more Americans back to work."

House Speaker John Boehner (R-Ohio) agreed with the need for quicker growth, saying that while "there's welcome news in this latest jobs report ... the fact is, our unemployment rate is still far too high," and "we must do better."

"Our economy still isn't creating jobs the way it should be, and that's why we need a new approach," he added, noting that "the House has passed nearly 30 bipartisan jobs bills focused on removing government barriers to private-sector job growth" and calling on Obama to urge Democrats in the Senate to "to take immediate action on our bipartisan jobs bills."

"Together, we can create a better environment for private-sector job growth," Boehner said.

The recent gains in the labor market reflect increasing confidence among private companies, which again fueled the job growth. The private sector added 257,000 jobs, offsetting the 14,000 in job cuts by the public sector -- namely, federal and local governments.

Still, unemployment remains historically high, and broad uncertainty, due mainly to the crisis in Europe, poses challenges to the US recovery in the months ahead.