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Former U.S. Marine Sean Ghigliotty meets a potential employer during a veterans job fair in New York City.
By msnbc.com news services
The U.S. economy created jobs at the fastest pace in nine months in January and the unemployment rate dropped to a near three-year low, offering a hopeful sign for hiring in the year ahead.
Employers added a net 243,000 jobs last month, the Labor Department reported Friday?-- that's the most since April and far?better than economists' expectations for a gain of only 150,000.
The nation?s unemployment rate fell to 8.3 percent in January from 8.5 percent in the prior month. The rate has dropped 0.8 percentage point since August and is now at its lowest level in nearly three years.
The decline in the jobless rate reflected large gains in employment in the separate household survey from which the jobless rate is derived. Fewer people left the labor force, and job gains were widespread, with even the transportation and warehousing sector increasing payrolls.
The upbeat tenor of the January jobs report was further strengthened by revisions to November and December payrolls data, which showed 60,000 more jobs created than previously reported. Hiring was widespread across many high-paying industries, and pay increased.
In addition, average hourly earnings rose four cents, which should help to support spending. The report suggested that expectations of a slowdown in U.S. economic growth in the first quarter were not yet impacting on companies' hiring decisions.
The continued labor market improvement could be a relief for President Barack Obama who faces a tough re-election campaign this year.
Economic data this week have pointed to an improving economy.
Manufacturing grew at its fastest pace in seven months in January, and fewer Americans sought unemployment benefits last week, showing companies are cutting fewer jobs. Also, retail sales increases last month, carmakers started the year with strong January sales and the U.S. economy expanded at a 2.8 percent annual pace in the final four months of last year. That was one percentage point higher than in the previous quarter.
Still, economists expect slower growth this year. Much of the growth at the end of last year was due to companies ordering more goods to restock their shelves. Also, Europe?s financial troubles could mean slower demand for U.S. goods.
The U.S. Federal Reserve last week said it would probably hold interest rates near zero at least through 2014, citing still-high unemployment.
Even with the January job gain, the economy faces a long?road back to full health. The nation has about 5.6 million fewer jobs than it did when the recession began in late 2007.
The Associated Press and Reuters contributed to this report.
The unemployment rate has dropped from 8.5% to 8.3% after the January unemployment report showed US employers added 243,000 jobs for the month. A CNBC panel discusses the data.
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