WASHINGTON - The unemployment rate is suddenly sinking at the fastest pace in a half-century, falling to 9 percent from 9.8 percent in just two months - the most encouraging sign for the job market since the recession ended.
More than half a million people found work in January. A government survey found weak hiring by big companies – but more people appear to be working for themselves or finding jobs at small businesses.
The steepest two-month decline in unemployment since the Eisenhower administration is the latest sign that the economic recovery is picking up speed.
The service sector and manufacturing are growing again at pre- recession rates. The Dow Jones industrial average closed above 12,000 this week for the first time since mid-2008. And retail sales have reached a five-year high.
“It is not all rosy. But we seem to be headed in the right direction,” said economist Chris Rupkey at Bank of Tokyo-Mitsubishi. “The recovery is on track — warts and all.”
Yields on government bonds rose after the unemployment report came out, a sign that bond traders think the job market is improving and will lift the economy after a year and a half of only modest growth.
An unemployment rate of 9 percent remains very high by historical standards. But the swift decline in the rate could also lift confidence at a time when businesses and individuals are already spending more money, fueling more hiring and still more spending.
Unemployment has not been this low since April 2009.