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Hiring surges in January; jobless rate at 8.3 pct.

By Christopher S. Rugaber

Associated Press

Published: Friday, Feb. 3 2012 10:06 p.m. MST

In this Feb. 1, 2012 photo, Navy veteran Shaundell Vannooten listens to a recruiter at a job fair sponsored by the Department of Veterans Affairs, in New York. The unemployment rate fell for the fifth straight month after a surge of January hiring, a promising shift in the nation's outlook for job growth.

Mark Lennihan, Associated Press

WASHINGTON — In a long-awaited surge of hiring, companies added 243,000 jobs in January — across the economy, up and down the pay scale and far more than just about anyone expected. Unemployment fell to 8.3 percent, the lowest in three years.

The job growth was the fastest since last March and April. Before that, the last month with stronger hiring, excluding months skewed by temporary census jobs, was March 2006.

The unemployment rate came down by two notches from December. It has fallen five months in a row, the first time that has happened since 1994, two economic booms and two recessions ago.

"The economy is growing stronger," President Barack Obama said. "The recovery is speeding up."

Indeed, the report Friday from the Labor Department seemed to reinforce that the nation is entering a virtuous cycle, a reinforcing loop in which stronger hiring leads to more consumer spending, which leads to even more hiring and spending.

On Wall Street, where investors had already driven stocks to their best start in 15 years because of optimism about the economy, the jobs report triggered a spasm of buying.

The Dow Jones industrial average climbed 156.82 points, its second-best showing this year, and finished the day at 12,862.23, its highest close since May 2008, four months before the financial crisis struck.

The Nasdaq composite index finished at its highest level since December 2000, during a steep decline after the dot-com stock craze. Money poured out of bonds, which are considered less risky than stocks, and bond yields rose.

"Virtually every economist on the planet had expected a drop in the rate of job gains in January, which makes today's upward surprise even more surprising," Dan Greenhaus, chief global strategist at the brokerage BTIG, said in a note to clients. In December, 203,000 jobs were created.

The impressive jobs report reverberated through the presidential campaign and could improve Obama's re-election prospects. The drop in the unemployment rate put it exactly where it was in February 2009, the month after Obama took office.

In Arlington, Va., the president argued that now was no time to let a 2-percentage-point cut in the Social Security payroll tax expire, as it will if Congress doesn't take action by the end of the month. The tax cut reaches 160 million Americans.

Of the economic recovery, he said: "We've got to do everything in our power to keep it going. We can't go back to the policies that led to the recession, and we can't let Washington stand in the way of the recovery."

His Republican foes used the numbers to argue that the pace of improvement was not good enough.

"We can do better," said former Massachusetts Gov. Mitt Romney, the Republican front-runner. "These numbers cannot hide the fact that President Obama's policies have prevented a true economic recovery."

Unemployment was 6.8 percent when Obama was elected, 7.8 percent when he was sworn in and 10 percent, its recent peak, nine months later. No president since World War II has won re-election with unemployment higher than 7.2 percent.

The job gains in January were widespread:

— The professional services category, which includes high-paying jobs like architects, accountants and engineers, added 70,000 jobs, the most in 10 months. The category also includes temporary workers.

— Manufacturing added 50,000 jobs, the most in a year, and the beleaguered construction industry added 21,000, its second straight month of strong gains. Construction added 31,000 jobs in December. Both months were probably helped by the warm winter.

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