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Job growth fuels optimism about U.S. recovery

January's figures don't quite meet analyst expectations, but sharp upward revisions on numbers dating to early 2011 help banish fears of recession and send stocks soaring.

February 01, 2013|By Jim Puzzanghera, Los Angeles Times

The higher payroll tax, which started showing up in paychecks in early January, was a drag on job growth in January, economists said.

More potential problems are looming as Congress must deal with large automatic spending cuts set to hit March 1. And another battle over the nation's debt limit could be coming this summer after Congress approved a temporary increase to avoid a potential showdown this month.

Swonk said such "fiscal land mines" could derail the recovery.

And Alan Krueger, chairman of the White House Council of Economic Advisors, warned that the jobs report showed "the need for Congress to act to avoid self-inflicted wounds to the economy."

Still, he said, the report was "further evidence that the U.S. economy is continuing to heal."

House Speaker John Boehner (R-Ohio), however, said President Obama should not accept "sluggish growth" and needs to work with Congress to find ways to improve growth and reduce the nation's debt.

Although the nation does not appear headed toward recession again — commonly defined as two straight quarters of contraction — the economy remains fragile, Swonk said.

"The labor market is healing, but unevenly," she said.

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