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U.S. unemployment rate falls unexpectedly, but job losses continue

The jobless rate declines to 9.7% in January from 10% in December. However, employers cut a net 20,000 jobs last month.

February 06, 2010|By Don Lee

The revised data show that three major industries -- construction, retail and business services -- each lost about a quarter of a million more jobs during the last two years than previously measured.

That means construction employers have erased about 1.9 million jobs since December 2007, or about 1 out of 4 jobs in that industry. That includes 75,000 jobs lost last month.

Manufacturing payrolls were revised only slightly lower, but over the last two years the industry has shed 2.2 million jobs -- and that translates to 1 out of 6 factory positions.

On the positive side, manufacturing payrolls saw a seasonally adjusted increase of 11,000 in January from December -- the first upturn since a gain of 6,000 jobs in January 2007. In recent months manufacturers have been restocking depleted goods as domestic orders have firmed up and sales overseas have increased.

That boost in inventory levels was the main force behind the nation's strong 5.75% annualized growth in gross domestic product in the fourth quarter of 2009.

In addition to manufacturing, there were net job gains last month in retail trade, health and education services and the temporary-help industry, which is seen as a harbinger of broader hiring. Since September, temporary staffing firms have added 247,000 jobs.

The federal government also added 33,000 jobs last month, including the first 9,000 of hundreds of thousands of temporary workers to be hired for the 2010 census.

Despite the improving trends, analysts generally don't see an immediate turnaround in the job outlook.

In its January survey of small businesses nationwide, the National Federation of Independent Business said new firms might add some to the job figures, but existing companies were not creating jobs yet.

Over the next three months, the survey said, more small employers were expecting to cut jobs than those planning to add to their payrolls.

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