The U.S. economy created 146,000 new jobs in January, bringing the jobless rate down to 5.2 percent, the lowest rate in over four years. The job total, while positive, was less than anticipated by financial markets.
Markets had expected job growth of up to 190,000. But despite the short fall financial markets reacted positively with New York stock prices rising when trading began Friday. The Labor Department revised downwards to 133,000 the number of jobs created in December. In both December and January jobs were created in the health care, services, retail and education sectors, while there was job loss in manufacturing. Kristin Forbes, a member of President Bush's Council of Economic Advisors, regards the January employment report as positive.
"We've now had 20 months of consecutive job gains, created 2.3 million jobs since the beginning of last year. And because of the job gains we've seen over the past month we're now at the highest level of employment ever in the United States," she said.
The Bush administration is predicting job growth will average 175,000 per month over the course of 2005.
In London, Federal Reserve Board Chairman Alan Greenspan Friday said the recent dollar decline and likely action to narrow the U.S. budget deficit could stabilize and even cut the record U.S. trade deficit.
The Federal Reserve Board chairman is in London for a meeting of finance officials from the world's richest industrial nations. Mr. Greenspan told a London conference that the voice of fiscal restraint, barely audible a year ago, has at least partially regained volume. President Bush is promising to reduce the U.S. fiscal deficit by half over the next four years.
Finally, a key gauge of consumer sentiment, issued monthly by the University of Michigan, registered a slight decline in January. Spurred by consumer spending, the U.S. economy has been growing at about a four percent annual rate.
