By Vicki Needham - 02/07/14 09:03 AM EST
A weak jobs report Friday that found employers added only 113,000 jobs in January is deepening concerns about the trajectory of the U.S. economy 10 months before Election Day.
It’s the second disappointing jobs report in a row, and U.S. and global stocks have taken a beating since the beginning of the year.
Republicans are seizing on the report to argue the Obama administration’s policies are holding back the recovery, which Speaker John Boehner (R-Ohio) on Friday said was the worst jobs recovery in history.
Senate Democrats and the White House started the year feeling bullish about holding the Senate given the perceived strength of the economy after the Commerce Department reported growth of more than 3 percent in the last two quarters of the year.
Democrats at the time said that if growth kept up, they would keep the Senate.
That confidence may be shaken a bit, however, by the latest jobs figures.
The White House said Friday that the report is another reminder that progress has been made since the “Great Recession,” but that challenges remain. That’s a message similar to the one the White House has offered to previous jobs reports.
The White House also suggested the January report was particularly susceptible to error because of sharp seasonal swings in employment that reflect the unwinding of temporary holiday hiring.
A release from the chairman of the White House Council of Economic Advisers noted that this seasonal variation “adds an additional margin of error to monthly estimates.”
Obama made remarks on the economy in Michigan, where he traveled today to sign the farm bill into law.
The White House has challenged Republicans to extend federal unemployment benefits that expired late last year. The extension is part of the White House’s election-year messaging effort focused on closing income inequality.
U.S. markets largely brushed off the report, blaming cold weather for its findings given positive growth in the economy in the fourth quarter. The Dow Jones was up more than 100 points in midday trading.
Mark Zandi, chief economist of Moody’s Analytics, said the cold weather in January was likely a factor in keeping growth low.
“I think the weather is all over these numbers, I don’t think anything fundamental has changed,” he said. “I think we’re going to get back on track as soon as the weather gets back on track.”
Observers had hoped that Friday’s report might show the economy had gained as many as 180,000 jobs.
While the unemployment rate fell to 6.6 percent in January, the sluggish jobs growth suggested the economy is still struggling to create jobs.
In December, the economy added just 74,000 jobs. Observers at the time blamed cold weather and suggested the numbers would later be revised up.
On Friday, the December number was revised, but only to a still-disappointing 75,000. The report did revise figures up higher in November, from 241,000 jobs to 275,000 jobs created.
Markets, which provide an indication of where investors think the economy is headed, have been down for the year. The Dow Jones industrial average has lost nearly 800 points since Jan. 1, though much of the losses have been attributed to the Federal Reserve’s decision to reduce its stimulus in the economy.
Other economic indicators have been more positive.
According to Thomson Reuters data, earnings are up for 67.9 percent of the 343 companies in the S&P 500 that have reported for the fourth quarter of last year. Thomson Reuters said that in a typical quarter since 1994, 63 percent beat estimates.
New home sales were down in December, according to the Commerce Department, but some analysts blamed that — like the jobs figures — on cold weather.
The 6.6 unemployment rate is the lowest the country has seen since October 2008. While much of that drop has been from people leaving the workforce, the labor force participation rate improved slightly in January, with 499,000 people jumping back into the workforce to look for work. The participation rate had hit a 35-year low in recent months.
The number of long-term unemployed, 3.6 million, also dropped by 232,000 in January.This story was updated at 1:26 p.m.