Recession fears ease with new jobs report and other economic data
WASHINGTON -- Fears of the U.S. economy falling into another recession eased Friday as several reports, including the latest jobs data and readings on manufacturing, construction spending and consumer confidence, indicated the recovery was continuing.
Economists and investors were heartened by the news, which suggested that growth accelerated at the end of last year.
The reports -- a mix of federal and private data -- contrasted with Wednesday’s government report that the economy contracted at a 0.1% annual rate in the last three months of 2012.
The new data, while not great, eased concerns that the economy was going in reverse during the fourth quarter, said Stuart Hoffman, chief economist at PNC Financial Services.
“We had some pretty good job growth in the fourth quarter,” he said. “You don’t get that kind of job growth if the economy is legitimately flat on its behind.”
The economy added 157,000 net new jobs in January and the unemployment rate ticked up to 7.9%, the Labor Department said.
But job growth ub October, November and December were revised sharply upward, with the new figures showing that the economy added an average of 201,000 jobs in each of those months.
In addition, the Commerce Department said Friday that construction spending increased 0.9% in December from the previous month, to an annual rate of $885 billion.
The manufacturing sector expanded in January for the second straight month, the Institute for Supply Management said Friday.
Consumer confidence also improved slightly last month after Washington policymakers avoided most of the tax increases slated to kick in on Jan. 1 as part of the so-called fiscal cliff.
The closely watched consumer sentiment index from Thomson Reuters and the University of Michigan rose to 73.8 in January from 72.9 the previous month.
One tax hike that did take place -- the expiration of the two-year payroll tax break -- held down consumer confidence, said Richard Curtin, the survey’s chief economist.
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