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Solid Jan. hiring would boost hopes for US economy

Published on NewsOK Modified: January 31, 2013 at 11:03 pm •  Published: January 31, 2013

Most analysts predict that the economy will grow again in the January-March quarter, though likely at a lackluster annual rate of around 1 percent. They expect the economy to expand about 2 percent for the full year.

Two key drivers of growth improved last quarter: Consumer spending increased at a faster pace. And businesses invested more in equipment and software.

In addition, homebuilders are stepping up construction to meet rising demand. That could generate more construction jobs.

And home prices are rising steadily. That tends to make Americans feel wealthier and more likely to spend. Housing could add as much as 1 percentage point to economic growth this year, some economists estimate.

Auto sales reached their highest level in five years in 2012 and are expected to keep growing this year. That's boosting production and hiring at U.S. automakers and their suppliers.

Some recent signs suggest that the job market is holding steady and may even improve a bit. The average number of people seeking unemployment aid each week in the past month is near a four-year low.

Weekly applications for unemployment benefits were distorted in January by the government's difficulties in seasonally adjusting its figures in January. Even so, applications are gradually ticking down, economists say.

Payroll provider ADP said Wednesday that private U.S. businesses added 192,000 jobs in January, up from 185,000 in December. Most of the gains came from small businesses, the ADP data showed.

The department will revise its estimates of job gains for the past five years on Friday. The changes are expected to show that the economy added more jobs in 2012 than previously thought.