Nonfarm payrolls rose only 74,000 last month, the smallest
increase since January 2011, and the unemployment rate fell 0.3
percentage point to 6.7 percent, the Labor Department said on
Friday. The unemployment rate was the lowest since October 2008 and
in part reflected people leaving the labor force.
The step back in hiring is at odds with other employment indicators
that have painted an upbeat picture of the jobs market. The data
showed that 38,000 more jobs were added in November than previously
Construction employment fell for the first time since May and
leisure and hospitality payrolls rose marginally, suggesting that
cold weather in some parts of the country had held back hiring.
There were also declines in government employment.
The smaller survey of households showed an increase in the number of
people who stayed at home because of the bad weather.
Economists polled by Reuters had expected job gains of 196,000 jobs
last month. But many pushed up their forecasts in the wake of upbeat
labor market data during the week.
A string of data — from consumer spending and trade to industrial
production — has suggested the economy ended 2013 on strong footing
and is positioned to gain even more strength this year.
The change in the economy's fortunes, which gave the Federal Reserve
confidence last month to start dialing back its massive monetary
stimulus, reflects waning fiscal uncertainty after lawmakers in
Washington agreed on a two-year budget.
The labor force participation rate, or the proportion of working-age
Americans who have a job or are looking for one fell 0.2 percentage
point to 62.8 percent.
Annual revisions to the data from the Labor Department's survey of
households, which is used to calculate the jobless rate, showed
minor changes to the rate.
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The U.S. central bank announced in December that it would trim its
monthly purchases to $75 billion from $85 billion, and many
economists expect it to decide on a similar-sized cut at its next
meeting on January 28-29.
Growth this year is expected to top 3 percent, a sharp acceleration
from the 1.7 percent forecast for 2013.
Last month government payrolls fell 13,000 after rising 15,000 in
Manufacturing employment rose for a fifth straight month. The number
of construction jobs fell 16,000.
Employment in the retail sector accelerated from November's
seven-month low, which economists had blamed on a late Thanksgiving.
There were also payroll gains in professional and business services.
Average hourly earnings rose 2 cents. The length of the workweek
fell to 34.4 hours from 34.5 hours.
(Reporting by Lucia Mutikani; editing by Andrea Ricci)
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