Financial News

  • 10 February 2014, 12:15

US Jobless At Five-Year Low But Hiring Weak

US employers hired far fewer workers than expected in January, hinting at a loss of momentum in the economy.

The unemployment rate dropped to a new five-year low of 6.6%, due to people leaving the workforce.

The number of non-farm payroll jobs was a lower-than-expected 113,000, more than 80,000 below the average monthly gain of 194,000 throughout 2013.

"It is an improvement but a number this soft does feed worries about slowing US growth," Joe Manimbo, senior market analyst at Western Union Business Solutions, told Reuters.

It was the second month in a row of weak new job creation,marked by declines in retail, utilities, government, education and health employment.

Only 75,000 new roles were created in December.

Sluggish job growth for a second straight month raises fears that the job market is weakening again.

Further rattling investors, the data also comes on the heels of a report this week that showed an unexpected drop in factory activity to an eight-month low in January.

Job gains have averaged 154,000 the past three months, down from 201,000 in the previous quarter.

The new data turned London's FTSE 100 index negative within minutes of the announcement before it returned to a flat level.

The statistics provide further evidence that the US economy is not recovering as quickly as hoped for.

Markets have been jittery for the past week and the data comes after the Federal Reserve reduced monthly quantitative easing by another $10bn (6bn), dropping the total to $65bn (40bn).

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