The U.S. economy was firing on all cylinders in January, drawing the unemployment rate down to a three-year low of 8.3 percent and creating nearly a quarter million new jobs, the Labor Department reported Friday morning.
It was the most robust jobs performance in months and signaled that the recovery in the labor market is finally starting to pick up speed. Businesses added 257,000 new jobs in nearly every occupation, from manufacturing and construction to health care and hospitality.
That drove down the unemployment rate to 8.3 percent from 8.5 percent in December. Unemployment has dropped by nearly a full percentage point since August and is now back to where it stood when President Obama took office at the beginning of 2009.
The department also published revisions showing that another 60,000 more jobs were created in December and November than it previously reported, and jobs gains were generally better in previous months of the recovery.
The only sector that sat out the upsurge in job growth in January was government. But even there, the pace of jobs losses slowed to a standstill in the first month of the year.
“January’s U.S. jobs figures were a humdinger,” said Marcus Bullus, economist at MB Capital. “They smashed expectations and will be a fillip to markets globally. The U.S. economy is growing and continuing to add jobs at an impressive rate.”
Mr. Bullus added that the swelling of growth at the turn of the year has important political implications.
“This latest data set will do President Obama’s re-election campaign no harm whatsoever. The Republicans have just been scrambled,” he said.
While the nation’s 12.5 million unemployed people got a bonus with nearly a half-million new jobs coming available around the turn of the year, those already working also got a small boost in wages. The annual rate of average wage gains ticked up to 1.9 percent from 1.7 percent, the department said.
The “solid gains” seen in the job market point to a “sustained recovery,” although many young people continue to avoid entering the market because of the difficulty they’re having finding jobs, said John Silvia, chief economist at Wells Fargo Securities.
House Speaker John Boehner, Ohio Republican, called the strong jobs report “welcome news,” but said the unemployment rate “is still far too high” and Washington must do more to try to bring it down.