WASHINGTON – The economy created jobs at the fastest pace in nine months in January and the unemployment rate dropped to a near three-year low of 8.3 percent, providing some measure of comfort for President Barack Obama who faces re-election in November.
Nonfarm payrolls jumped 243,000, the Labor Department said on Friday, as factory jobs grew by the most in a year. The gain in overall employment was the largest since April and outpaced economists’ expectations for a rise of only 150,000.
The report pointed to underlying strength in the economy, despite expectations that growth will slow in the first quarter.
Economists had expected the jobless rate to hold steady at 8.5 percent. The rate is the lowest since February 2009 and has dropped 0.8 percentage point since August.
The decline last month reflected large gains in employment in the separate household survey from which the unemployment rate is derived.
“It’s certainly supportive of the U.S. recovery and suggests that momentum is gathering pace,” said Brian Dolan, chief market strategist at FOREX.com in Bedminster, N.Y.
U.S. Treasury debt prices fell sharply on the report, while stock index futures surged. The dollar rose against the yen.
The continued labor market improvement could be a relief for Obama who faces a tough re-election.