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2/7/14

US Economy Struggling: - January Job Figures Disappointing And Outlook Grim

Following the US job report by the US Government, Ian Shepherdson, chief economist at Pantheon Macroeconomics, in a note to clients Friday mornin wrote: “In one line: grim.”

Employers added jobs at a slower-than-expected pace in January, the second month in a row that hiring has been disappointing and a sign that the labor market remains anemic despite indications of growth elsewhere in the economy.

The data for January come after an even more disappointing report on the labor market for December, which was revised upward only slightly Friday, to show a gain of just 75,000 jobs, from 74,000. The level of hiring in January was also substantially below the average monthly gain of 178,000 positions over the last six months, as well as the monthly addition of 187,000 over the last year.

The two weak months in a row will prompt questions about whether the Federal Reserve acted prematurely when policy makers in December voted to begin scaling back the central bank’s expansive stimulus efforts.

Note EU-Digest: Extending federal long-term jobless benefits is the latest source of political tension on Capitol Hill. Republicans have said they want to offset its $6.4 billion price tag with cuts somewhere else. 

"I made clear that we would consider it, extending emergency employment benefits, if it was paid for and if there were provisions that we could agree to that would get our economy moving again and put the American people back to work," said House Speaker John Boehner.

"We particularly hope that the Republican majority in the House will not just block anything we do, if we're able to come to an agreement.  If they do, it's going to hurt them in the election," said Senator Charles Schumer.

Meanwhile, the US Labor Secretary says that while the economy is showing steady overall growth it still has three applicants looking for one available job, and he’s pushing Congress to renew those benefits.

Read more: Jobs Report May Raise Questions on Pullback of Stimulus - NYTimes.com

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