Wary employers slowed hiring in January, pushing the unemployment rate to a four-month high of 4.6 percent and giving job seekers a bumpy start to the year.
Still, the Labor Department’s employment report yesterday suggested the jobs market remains in solid shape.
The more subdued job creation in January — 111,000 new positions compared with 206,000 in December — is consistent with the expectation that the economy’s growth as a whole will moderate. That means the unemployment rate may slowly climb this year.
“Across a range of employers’ behavior, there is some caution. They are wondering how an expected moderation in economic activity will evolve,” said Ken Mayland, president of ClearView Economics. Analysts predict the economy will lose some speed in the January-to-March period following an energetic October-to-December quarter.
Factories, automotive companies, home builders and furniture makers cut jobs last month, casualties of the housing slump and the ailing auto industry. Hotels and motels, clothing stores and telecommunications companies also shed jobs.
Those losses tempered job gains at hospitals and nursing homes, bars and restaurants, architectural and engineering firms, accounting and bookkeeping companies, the government and other places of business.
“Businesses were not in the greatest hiring mood,” said Joel Naroff, president of Naroff Economic Advisors.
Against this backdrop, January’s unemployment rate rose from 4.5 percent in December to its highest point since September. Even with the bump-up, though, the seasonally adjusted civilian employment is low by historical standards. During the depths of a recession in the early 1980s, for example, the unemployment rate hit double-digit levels.
The latest employment figures “don’t change our view that the job market is still robust. Opportunities still seem to be bright,” said Carl Tannenbaum, chief economist at LaSalle Bank.
Last month’s hiring affected people in different ways. The jobless rate for Hispanics rose to 5.7 percent, the highest in a year. The jobless rate for blacks fell to 8 percent, the lowest in 51/2 years. The unemployment rate for whites edged up to 4.1 percent, the highest in five months.
The report comes as President Bush, in economic speeches this week, has sought to soothe some workers’ anxieties about their ability to keep or find a job in a dynamic economy that puts an increasing emphasis on skills, education and flexibility. Democrats, now in control of Congress, pledge to help the middle class, a group they contend the White House has ignored. Getting final agreement in Congress on legislation boosting the federal minimum wage from $5.15 to $7.25 an hour is a top priority.
As job growth moderated in January, so did growth in workers’ wages.
Average hourly earnings rose to $17.09, a modest 0.2 percent increase from the prior month and half the pace seen in December. Over the 12 months ending in January, wages grew by 4 percent.
Economists said these wage gains should help keep consumers spending, a contributor to overall economic health. With inflation ebbing, people will have more money left over from their paychecks to spend on other things.
The job hunt also grew longer.
The average time that the 7 million unemployed people spent in their job searches was 16.2 weeks in January, up from 15.9 in December.