Despite economists' expectations that the unemployment rate would climb well into the economic recovery, the percentage of unemployed, job-seeking Americans fell 0.3 percentage point in January to 9.7%, its lowest point since August.
The unemployment rate is calculated through a separate survey from the payroll count, which found the nation's employers still reluctant to add new workers, as jobs fell by 20,000.
The report truly brought mixed news. While employers are still not beefing up their payrolls, the Labor Department's survey of households found major employment gains.
The results were altogether better than many were expecting.
"All in all, we see encouraging signs of progress in labor market conditions and expect to see much better payroll performance . . . in coming months," Morgan Stanley economists Ted Wieseman and David Greenlaw wrote in a morning note.
Where is the hiring? For one thing, the Labor Department reports that the number of people in part-time jobs who want full-time work but can't find it or had their hours cut, fell from 9.2 million to 8.3 million.
Not surprisingly, the average number of hours worked in a week rose 0.1 hour to 33.3 hours.
These are good indications that demand is picking up and employers are responding by paying their employees to work more hours, which may be a first step, before they begin hiring new workers.
"Whether this is a harbinger of stronger gains in permanent employment or a reflection of many businesses still not being convinced that they need to pull the trigger on permanent hires remains to be seen," says Joshua Shapiro, the chief U.S. economist at MFR.
The retail sector also saw job growth, adding 42,000 jobs last month. The biggest gains were in food stores and clothing stores.
Health care continued to expand its payrolls, and the federal government added 33,000 jobs, 9,000 of which are temporary positions for the census. State and local governments, wrestling with major budget woes thanks to a double whammy of higher recessionary expenses and lower tax revenues, continued to lose jobs.
Who's starting to benefit? This recession has been coined the "man-cession" because of the massive job losses in the construction and manufacturing industries, which traditionally employ disproportionately high percentages of men. Indeed, last month, women made up an astounding 49.9% of employed workers.
When the recession began in 2007, 48.8% of nonfarm payroll employment was made up of women. Last month the unemployment rate for women fell to 7.9%, compared with a steady 10% unemployment rate among men.
A major bright spot in the report was the significant decline in the percentage of underemployed workers -- the job-seeking unemployed plus those who are working parttime but want full-time work; the unemployed who are not looking for work because they are in school or have other obligations; as well as those who have simply lost hope for finding work.
In January, the underemployed made up 16.5% of the work force, down 0.8 percentage point from December.
Continued: 'Closer to calling the peak'
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