Job growth fuels economic optimism

WASHINGTON — Fears of a recession seemed to evaporate as the nation added 157,000 net jobs last month and other key economic data improved, boosting major stocks to their highest level in more than five years.

Economists and investors were heartened by the Labor Department's jobs report Friday, which suggested that growth accelerated at the end of last year.

The new economic readings — a mix of federal and private data — contrasted with an earlier government report that the economy contracted at a 0.1 percent annual rate in the last three months of 2012.

The January jobs report, which also showed the unemployment rate ticked up to 7.9 percent, came in slightly below analyst expectations. But revised job growth figures dating to early 2011 triggered a surge of optimism that the recovery had not veered off track.

"The economy's the little engine that could," said J.J. Kinahan, chief derivatives strategist for TD Ameritrade. "It's slowly climbing."

The Dow Jones industrial average shot up nearly 150 points, closing above 14,000 for the first time since 2007. The White House touted the 35th-straight month of private-sector job growth.

And analysts pointed to sharp upward revisions by the Labor Department of previous job creation, particularly in the final three months of last year, as proof that the recovery still was moving forward.

The government said there were 422,000 more jobs created than initially reported for the year ended last March 30. And from April through December, the Labor Department revised upward its earlier estimates by 225,000 jobs.

Altogether, that added nearly 650,000 people to the workforce. The new figures mean that on average, the economy added 181,000 jobs each month last year, up from the earlier estimate of 153,000.

In the last three months of the year, the economy averaged 201,000 jobs added, including 247,000 in November and 196,000 in December.

"We had some pretty good job growth in the fourth quarter," said Stuart Hoffman, chief economist at PNC Financial Services. "You don't get that kind of job growth if the economy is legitimately flat on its behind."

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