Dow Cracks 14,000 After Strong Economic NewsFebruary 1st, 2013 4:33 pm Henry Decker
The U.S. economy added 157,000 jobs in January, according to the Labor Department’s monthly jobs report, one of several pieces of good economic news that led to a a stock market rally on Friday.
Although the unemployment rate rose to 7.9 percent (from 7.8 percent last month,) the jobs report was full of mostly positive indicators. In addition to the solid gains in January, the Labor Department updated its estimates for December, from 196,000 to 155,000, and November, from 161,000 to 247,000.
Those estimates mean that 2,170,000 jobs were created in 2012; as Steve Benen points out at Maddow Blog, that represents the best annual total since 2005, and beats seven out of the eight years of the Bush administration.
Benen also provides this useful chart, illustrating monthly job totals since the Great Recession began in January, 2008:
“While more work remains to be done, today’s employment report provides further evidence that the U.S. economy is continuing to heal from the wounds inflicted by the worst downturn since the Great Depression,” Chairman of the Council of Economic Advisors Alan Krueger wrote in a blog post on the White House website.
The solid jobs report was just one of several positive economic indicators to come out on Friday. Auto sales rose 14 percent from January of last year, with major companies such as General Motors and Toyota beating expectations. The construction industry also had a strong month, adding 28,000 jobs in January and nearly 100,000 jobs over the past four months, suggesting that a housing recovery may finally be taking hold.
Wall Street reacted very positively to the news; the Dow Jones industrial average surged on Friday, and even crossed the 14,000 point barrier for the first time since the financial collapse. The Dow now sits within reach of its all-time record of 14,163.53.
Republicans chose to latch on to the slight rise in unemployment, and hit President Obama for disbanding his jobs council.
“This is the wrong time for President Obama to scrap his jobs council and delay his budget,” House Speaker John Boehner said in a statement. “Month after month we see the same thing: high unemployment and even more debt. More than 12 million Americans are still unemployed, and it’s been that way for far too long. If government spending were what causes economic growth, as the president believes, then the economy today should be booming, and the unemployment rate in America should be plummeting.”
While Boehner may score some points by attacking the Obama administration’s politically ill-timed announcement regarding the jobs council, at the end of the day he and colleagues remain the greatest threat to the economy. Possible sequestration cuts, scheduled to take effect on March 1st, and a potential government shutdown could derail many of the gains the economy has made.
As Krueger writes on the White House blog, “Today’s report is a reminder of the importance of the need for Congress to act to avoid self-inflicted wounds to the economy.”