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Last Updated: Friday, 6 February, 2004, 15:17 GMT
US jobs growth gathers pace
New York shoppers
Shoppers have helped boost the US retail sector
American firms hired an extra 112,000 people in January - the highest monthly increase in more than three years.

The rise - the biggest since December 2000 - saw the US monthly unemployment figure fall to 5.6%.

Yet many commentators were disappointed with the figures, saying they wanted to see a bigger rise in employment for proof of deep-rooted economic growth.

And while new positions were created in a number of industries, such as retail, some sectors actually cut jobs.

Slow growth

"It is not a disaster," said Sal Guatieri, senior economist at financial group BMO.

"We have seen grudging improvement in job performance from the sharp declines of a couple of years ago."

"But it is still not the strong jobs growth that would be consistent with an economy growing above its potential," Mr Guatieri added.

"It is evidence that businesses are still reluctant to hire in a big way."

A breakdown of the official US Labor Department data showed that 76,000 jobs were created in the US retail sector, 24,000 in construction, 22,000 in education and health, and 21,000 in leisure and hospitality.

Steady reduction

Job reduction was reported in professional and business services (22,000), the public sector (13,000) and manufacturing (11,000).

The 5.6% US unemployment rate is now at its lowest level since January 2002, but analysts were still not satisfied.

"The economy is still not generating jobs as quickly as economists believe it should be," said Amy Cutts, economist at financial services group Freddie Mac.

"The one good sign is that the unemployment rate has been falling steadily for the last several months," she added.

Author and economist Doug Henwood said employers had yet to regain their confidence after the abrubt downturn that followed the technology bubble of the late 1990s.

"A lot of employers felt very badly burned by the bubble, and they're very reluctant to undertake new commitments," he told the BBC's World Business Report.

With US presidential elections in the autumn, President George W Bush will be hoping that the growth in job creation speeds up.




WATCH AND LISTEN
Doug Henwood, author and economist.
"A lot of employers felt very badly burned by the bubble."



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