Unemployment Rate in US Drops to 9% Despite Modest Job Growth

Unemployment: The U.S. unemployment rate dipped to 9 percent despite modest job growth due to an influx in small businesses and self-employment.
Unemployment Rate in US Drops to 9% Despite Modest Job Growth
Unemployment: A job seeker looks at a bulletin board with job listings at the Career Link Center One Stop job center Feb. 4 in San Francisco, Calif. A report by the U.S. Labor Department showed a drop in January's unemployment rate to 9 percent. (Justin Sullivan/Getty Images)
2/4/2011
Updated:
10/1/2015
<a><img src="https://www.theepochtimes.com/assets/uploads/2015/09/unemployment_jobs_108826025.jpg" alt="Unemployment: A job seeker looks at a bulletin board with job listings at the Career Link Center One Stop job center Feb. 4 in San Francisco, Calif. A report by the U.S. Labor Department showed a drop in January's unemployment rate to 9 percent. (Justin Sullivan/Getty Images)" title="Unemployment: A job seeker looks at a bulletin board with job listings at the Career Link Center One Stop job center Feb. 4 in San Francisco, Calif. A report by the U.S. Labor Department showed a drop in January's unemployment rate to 9 percent. (Justin Sullivan/Getty Images)" width="320" class="size-medium wp-image-1808765"/></a>
Unemployment: A job seeker looks at a bulletin board with job listings at the Career Link Center One Stop job center Feb. 4 in San Francisco, Calif. A report by the U.S. Labor Department showed a drop in January's unemployment rate to 9 percent. (Justin Sullivan/Getty Images)
The U.S. unemployment rate dipped to 9 percent despite modest job growth due to an influx in small businesses and self-employment, the Labor Department and Bureau of Labor Statistics (BLS) said in announcements on Friday.

Although business payrolls only reported the addition of 36,000 jobs, January unemployment fell sharply by 0.4 percentage point to 9 percent.

In the last two months, the nationwide unemployment rate has been in freefall, plummeting 0.8 percent—its sharpest decline in more than 50 years, according to the BLS and the Associated Press.

Job gains were primarily attributed in the surge of new start-ups and the number of people working for themselves.

“What we’re finding is that there are a lot of folks that are saying that they are starting new businesses or they are self-employed,” Labor Secretary Hilda Solis told AP.

The number of self-employed Americans rose by 165,000 to 9.7 million in January, the Associated Press reported, citing Labor Department data.

Among payroll jobs, manufacturing and retail were the big gainers, adding 49,000 and 28,000 jobs respectively, outweighing jobs shed in the construction and transportation industries.

“The data show the unemployment rate fell in January because more people are working and not because people are leaving the labor force,” Solis said.

Despite the encouraging unemployment rate numbers, the 36,000 jobs created in January fall short of analysts’ expectations of nearly 150,000 job additions, Reuters reported.

However, several waves of inclement weather—including blizzards in the Northeast and in the Midwest US last month—as well as an adjustment to the Labor Department’s households surveys, which contribute to some unemployment figures, have been cited as possible influences in the wonky and unexpected data.

Nearly 900,000 people across the country missed work due to severe weather last month, which adversely affected payroll numbers, Reuters reported, citing a Labor Department official.

The BLS also announced that it was incorporating new census data into its latest unemployment report, which in December overcounted the population by 347,000, the labor force by 504,000, and jobs by 472,000.

On Thursday, Federal Reserve Chairman Ben Bernanke said that the unemployment rate may take several years to fall to normal levels and that the economy depends on employer hires to cut into the unemployment rate.

“Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established,” Bernanke said, according to the previous Epoch Times report.