US adds 113,000 jobs in January

The US economy added 113,000 jobs in January, the second month in a row the figure has been weaker than expected.

Economists had predicted the US Labor Department would report an increase of about 180,000 new jobs.

However, the unemployment rate fell to 6.6%, the lowest level since October 2008.

The jobless figures will raise concerns that, after strong growth in the second half of 2013, the US economic recovery is beginning to lose its steam.

The unemployment rate is calculated from a different survey to the jobs figure - known as non-farm payrolls. The rate is based on a survey of households, while the jobs figure is based on a survey of companies.

December's surprisingly weak payrolls figure was revised up only modestly to 75,000, from 74,000.

The construction industry, most vulnerable to the impact of bad weather, added 48,000 jobs in January indicating that while the weather may been responsible for December's weak figures, it does not appear to have been a factor in January.

Manufacturing hiring also picked up, adding 21,000 jobs.


There were declines in hiring in retail, utilities, government, and education and health employment.

'Ugly headline'
Earlier this week, an unexpectedly weak manufacturing report raised concerns about the strength of the US economy and sent the Dow Jones tumbling by 326 points.

However, analysts were not too despondent about the latest numbers.

"We think the employment market is improving, but will do so in fits and starts," said David Carter from Lenox Wealth Advisors immediately after the numbers were released.

"Today, the ugly headline number will negatively impact markets, but there are enough positive indications that ultimately the market will move higher over time."

Joe Manimbo, senior market analyst at Western Union Business, said: "It is an improvement but a number this soft does feed worries about slowing US growth. The report fans uncertainty about the Federal Reserve's next move.

"Anyone looking for an alibi can point to the weather; it does not derail hopes of faster US growth and further Fed tapering," he added.

The US central bank has started withdrawing its extra support for the economy - a process known as tapering - after judging that the economy was improving, citing stronger job growth as one of the factors.

It had been spending $85bn a month buying up bonds, but has now reduced that to $65bn a month.

The unemployment rate is now very close to 6.5% - the level at which the Federal Reserve said it would start to consider an increase in interest rates.