Payrolls Grow Below Forecast

Payrolls expand for sixth straight month, but 112,000 gain is below estimates; jobless rate down.

February 6, 2004

NEW YORK (CNN/Money) - U.S. employers added thousands of jobs to their payrolls in January, the government said Friday, but the number again fell short of Wall Street forecasts.

Payrolls outside the farm sector grew by 112,000 jobs, the Labor Department said, compared with an upwardly revised gain of 16,000 in December. It was the sixth straight month of payroll gains. The unemployment rate fell to 5.6 percent from 5.7 percent in December.

Economists, on average, expected 165,000 new jobs and unemployment at 5.7 percent, according to Briefing.com.

On Wall Street, stock market futures gave up some of their earlier gains but stayed in positive territory, while Treasury prices fell.

In its report, the Labor Department said payrolls in service industries such as education and health care grew by 105,000 jobs in January. Retailers added 76,000 jobs, but temporary help payrolls fell for the first time in several months. Typically, temp hiring is a sign employers are gearing up to make permanent hires.

Manufacturing shed 11,000 jobs, the 42nd straight month of falling factory payrolls.

Average hourly wages rose to $15.49 from $15.47 in December. Average weekly earnings rose $3.76 to $522.01. Wage growth is crucial for consumer spending, which fuels two-thirds of the economy.

The average work week expanded to 33.7 hours from 33.5 in December, indicating businesses increased activity.

http://money.cnn.com/2004/02/06/news/economy/jobs/index.htm