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Labor Market Continues to Improve Slowly

Jobless Rate Dips to 5.2 Percent

By Nell Henderson
Washington Post Staff Writer
Friday, February 4, 2005; 2:53 PM

The nation’s longest job slump since the Depression ended last month when U.S. employers hired enough new workers to boost total payrolls above the level before the 2001 recession.

The nation’s unemployment rate fell to 5.2 percent in January -- the lowest level since September 2001 -- from 5.4 percent the prior month, the Labor Department reported today.

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Bureau of Labor Statistics Employment Situation Summary

However, job growth has slowed in recent months, and the unemployment rate dropped primarily because hundreds of thousands of people stopped working or looking for jobs, the data showed.

These and other details depict a labor market that continues to improve, but more slowly than in any post-recession period since the department began keeping records in 1939, economists said.

"January was another month of soft payroll growth for the U.S. economy," said Peter E. Kretzmer, senior economist at Bank of America Corp. "This almost four-year period of no net job growth illustrates just how delayed and soft the rebound in employment has been in the current expansion."

Stock prices rose after the report was released as many investors concluded that the pace of job growth was good enough to keep the economy growing, but not so fast that it would prompt the Federal Reserve to raise interest rates more aggressively to squelch inflationary pressures.

Retailers, financial firms, hospitals, educators and other employers expanded their workforces while manufacturers shrank theirs for a fifth straight month. Combined, they added 146,000 nonfarm payroll jobs in January, after seasonal adjustment, the Labor Department reported today.

That gain pushed the number of U.S. nonfarm payroll jobs to 132.6 million -- slightly higher than the 132.5 million on the books in February 2001 at the high-point before the recession, according to the figures released today, which included revisions of employment data back through 2000.

That meant the nation had recouped the more than 2.7 million jobs that employers cut during the recession and for more than a year afterward.

The 47 months it took -- from February 2001 through last month -- was more than twice as long as the average 21 months it has taken to return to a pre-recession job peak, according to an analysis of the data by the Economic Policy Institute, a think tank that focuses on labor issues.

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