Jobs report shows market faces more tough sledding

Snap analysis: Labor secretary says raising minimum wage would boost consumption and create jobs

Labor Department figures showed that January was the second month in a row when job creation was tepid.
J. Scott Applewhite/AP

The Labor Department reported Friday that just 113,000 nonfarm payroll jobs were created in January. That’s well below the 185,000 that economists had estimated in a Thomson Reuters survey.

The latest figures follow a weak December, when just 75,000 jobs were added.

“This is two months in a row when we’ve had really tepid jobs growth,” said former Deputy Secretary of Labor Seth Harris. “It’s an indication the economy is not recovering fast enough, and, sadly, the economy may actually be slowing down.”

The unemployment rate dropped to 6.6 percent. And the number of Americans working or actively looking for work — the labor participation rate — rose to 63 percent from the previous month’s 62.8 percent.

Labor Secretary Tom Perez told Al Jazeera’s Ali Velshi the situation would have been much better if hundreds of thousands of government workers had not been laid off over the past few years.

“If we had just kept government jobs flat during that period, zero growth, our unemployment rate would be something like 6.2 percent,” he said.  “It’s unfortunate.”

On the plus side, many of the jobs that were created were higher-paying.  Manufacturing saw an increase of 21,000 jobs, and construction jobs jumped by 48,000.

Kevin Kerr, president and CEO of Kerr Trading International, believes those areas are key to a strong job recovery.

“We’re going to have to see continued growth in construction, in manufacturing and more consistent and positive numbers to get out of this quagmire,” he said.

Perez characterized the gains in construction and manufacturing as encouraging, and called on Congress to act on President Barack Obama’s initiatives to create more good jobs.

“There’s undeniably a need to pick up the pace,” he said. “That’s why immigration reform is so important, that’s why infrastructure investments are so important.”

He also believes job growth would be helped by increasing the minimum wage.

“We haven’t passed a minimum wage bill in way too long, so we’re not putting enough money in people’s pockets, so they can’t consume as much,” he said.

Friday’s report raised questions about whether the Federal Reserve will continue reducing — or “tapering” — its monetary-stimulus program. New Fed Chair Janet Yellen is likely to discuss that when she testifies before Congress next week.

“We need to see real long-term growth, wage increases and improving numbers consistently before the Fed can really embark on a path of solid tapering,” Kerr said. “So right now a lot is in question about what happens next with the Fed.”

Harris believes that until the employment picture improves, the U.S. recovery will be on hold.

“It’s an anchor around the neck for the American economy,” he said.

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