US job market looks surprisingly strong
WASHINGTON — The U.S. job market is proving surprisingly strong and raising hopes that the economy will be resilient enough this year to withstand a budget standoff in Washington and potentially deep cuts in federal spending.
Employers added 157,000 jobs last month, and hiring turned out to be healthier than previously thought at the end of 2012 just as the economy faced the threat of the “fiscal cliff.”
Still, unemployment remains persistently high. Unemployment ticked up to 7.9 percent last month from 7.8 percent in December.
Many economists, though, focused on the steady job growth — especially the healthier-than-expected hiring late last year. The Labor Department revised its estimates of job gains for November from an initial 161,000 to 247,000 and for December from 155,000 to 196,000.
The department also revised its figures for all of 2012 to an average of 180,000 new jobs a month from 150,000.
“The significantly stronger payroll gains tell us the economy has a lot more momentum than what we had thought,” Joseph LaVorgna, chief U.S. economist at Deutsche Bank, said in a research note.
The government frequently revises the monthly job totals as it collects more information. Sometimes the revisions can be dramatic, as in November and December.
The January jobs report helped fuel a powerful rally on Wall Street. Stock averages all jumped more than 1 percent. The Dow Jones industrial average closed above 14,000 for the first time since October 2007, two months before the Great Recession officially began.
Beyond the job market, the economy is showing other signs of health. Factories were busier last month than they have been since April 2012. Ford, Chrysler and General Motors all reported double-digit sales gains for last month, their best January in five years.
Home prices have been rising steadily. Higher home values tend to make Americans feel wealthier and more likely to spend. Housing construction is recovering, too. Construction spending rose last year for the first time in six years and is expected to add 1 percentage point to economic growth this year.