U.S. employers added 113,000 jobs in January, the Labor Department reported Friday. The figure comes in well below consensus expectations, which had been at around 180,000. The unemployment rate also fell 0.1 percentage points, to 6.6 percent.
The latest payrolls figure is a marked improvement from December’s initial estimate of 74,000 new jobs. This month, that disappointing number was barely revised, to 75,000, which may signal that the low figure was not a fluke, as some had speculated.
Industries adding the most jobs include construction, with 48,000 new jobs, and professional and business services, with 36,000. The leisure and hospitality industry also added 24,000. Meanwhile, government subtracted 29,000 workers, and retail lost nearly 13,000 workers.
The unemployment rate has sunk considerably in the past year, from 7.9 percent in January 2013 to 6.6 percent last month. While the jobless rate has in part fallen because Americans have found new jobs, a falling labor force participation rate is also a reason. To be counted as unemployed, people need to be in the labor force, meaning they need to be actively seeking jobs. When people get discouraged by a bad job market and stop looking, they drop out of the labor force, meaning a lower unemployment rate despite a little-improved labor market.
That participation rate ticked slightly upward, from 62.8 to 63 percent in January, but it remains depressed. The labor force participation rate had often stood above 67 percent in the late 1990s.
The Federal Reserve has maintained that it would keep near-zero interest rates at least until the unemployment rate hits 6.5 percent. As that threshold approaches despite slow job growth, it is possible the central bank may have to change its messaging or its target. Atlanta Fed President Dennis Lockhart said this week he thinks “it is reasonable to expect the Federal Open Market Committee will revise forward guidance” as the 6.5 percent threshold approaches.
Corrected on Feb 7, 2014:
A previous version of this article incorrectly listed which sector
added 24,000 jobs and misstated the number of jobs lost by the retail sector.