Here’s Why the Unemployment Rate is Back Up

Employers in the United States added fewer jobs in January than in previous months, bringing the rate of unemployment back up to 7.9 percent from 7.8 percent. The U.S. economy added 157,000 jobs compared to 196,000 jobs in December, according to data released by the Department of Labor on Friday.

The numbers were close to what economists had predicted.

Job increases came in the retail, construction, healthcare, and wholesale trade sectors, while the federal government made cuts. As The New York Times reported, government payrolls have decreased almost every month in the last four years.

Poor hiring figures contribute to the string of negative economic reports released this week; the Commerce Department announced that the gross domestic product – or the nation’s economic output – unexpectedly shrank in the last month of 2012 and the Conference Board reported that consumer confidence fell to its lowest level in more than a year as Americans became increasingly pessimistic about their personal finances and job prospects. The payroll tax increase did not help either.