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U.S. jobless rate dips to 8.3% after hiring surge

Economy unexpectedly created 243,000 netjobs in January.

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The government also issued its annual revisions to jobs data going back five years. They showed that hiring was stronger over the past two years than previously thought. The economy added about 1.82 million jobs last year, compared with an original estimate of 1.64 million.

"This is a very positive employment report from almost any angle," said Brian Bethune, an economics professor at Amherst College.

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The government uses a survey of mostly large companies and government agencies to determine how many jobs were added or lost each month. That survey produced the 243,000 number.

It uses a separate survey of households to determine the unemployment rate. The household survey had more good news: 631,000 people said they found work in January. That pushed the unemployment rate down to 8.3 percent and the number of unemployed down to 12.8 million, the fewest in three years.

And 250,000 people streamed back into the work force and started looking for jobs. That increased slightly the size of the work force, which the government defines as people working and people unemployed but seeking work.

At the same time, the proportion of the population working or looking for work is its lowest in almost three decades. The length and depth of the recession have discouraged millions of people from looking for jobs. The better news of the past couple months has not yet encouraged most of them to start searching again.

Economists said the report probably makes it less likely that the Federal Reserve will take additional steps to help the economy soon, such as the massive bond-buying programs it launched in 2008 and 2010. That was another reason bond prices fell after the report was released.

The Fed has already held its benchmark short-term interest rate near zero for three years and bought almost $2 trillion in government bonds and other securities to keep long-term rates low.

Fed Chairman Ben Bernanke said last week that the central bank planned to keep its short-term rate near zero at least until late 2014. But if the unemployment rate keeps coming down, that date could be moved up, several economists said.

Even with January’s gains, the job market is a long way from full health. The nation has about 5.6 million fewer jobs than it did when the Great Recession began in December 2007.

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Employers have added an average of 201,000 jobs a month the past three months. That’s 50,000 more than the economy averaged each month last year.

Still, 11 million people either have stopped looking for jobs or are working part time and would rather work full time. When those people are added to the 12.8 million unemployed, nearly 24 million are considered underemployed. The so-called underemployment rate edged down in January to 15.1 percent, from 15.2 percent.

Although the road back from the Great Recession certainly seems long, it would not be unusual for hiring to accelerate, as it appears to be doing, 31 months after the recession ended in June 2009.

After the previous recession, which lasted from March through November 2001, it took until March 2004 — 28 months after the economy started growing again — for hiring to pick up considerably. The recession before that was from July 1990 through March 1991, and it took 22 months, until January 1994.

The Great Recession was longer and deeper than the previous two recessions, or any other since the Depression, so a longer lag hasn’t been surprising to some economists.

The jobs report put an exclamation mark on a week of encouraging economic news.

— Manufacturing grew in January at the fastest pace in seven months. Factory orders rose in December by 1.1 percent, driven higher by big increases in spending on industrial machinery and autos.

— The four-week average of people filing for unemployment benefits fell to its second-lowest since June 2008. The drop shows that companies are cutting fewer jobs, which usually leads to more hiring.

— Automakers began 2012 with a strong sales gain in January. Healthier auto sales can boost a range of companies, from steel makers to parts suppliers to shippers.

Also Friday, a private trade group said U.S. service companies, including stores, hotels and restaurants, expanded at the fastest pace in nearly a year in January. The survey’s employment index soared to its highest level in nearly six years.

The economy grew faster every quarter last year. From October through December, it expanded at a 2.8 percent annual rate, the best since the spring of 2010 and a full percentage point higher than in the previous quarter.

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