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Housing Plays Small Part as Economy Adds 243K Jobs

A still-brittle economic recovery picked up steam in January as the private sector added 243,000 jobs, driving unemployment figures to lows not seen in three years.


The ""Labor Department"":http://www.dol.gov/ said that the national unemployment rate fell to 8.3 percent, signaling the lowest seen since early 2009.

Manufacturing, business services, hospitality and leisure helped drive the surge, while construction emerged as the only housing-related sector to create any steam for the pickup in January.

Construction added 21,000 jobs from December, with gains for nonresidential construction and specialty trade contractors.

Financial services lost some 5,000 jobs from last month by comparison. Real estate services picked up 3,500 jobs, while rental and leasing services slid back by 1,600.

""Federal Reserve"":http://www.federalreserve.gov/ chairman Ben Bernanke continues to frame a weak housing recovery as a stumbling block for the broader economy.

Testifying before lawmakers Thursday, he said that high negative equity creates a disincentive for homeowners to buy


new homes or refinance their mortgages at a time for historically low interest rates.

""Housing is still extremely depressed,"" says ""Nigel Gault"":http://www.ihs.com/capabilities/experts/nigel-gault.aspx, chief U.S. economist with ""IHS Global Insight"":http://www.ihs.com/products/global-insight/index.aspx. ""There have been some signs of improvement in multifamily construction and not much so far in single-family, so we're still at very low levels of construction activity.""

He adds that debt crises in Europe and job losses at the nation's biggest banks mean that the ""financial services sector is still going to remain troublesome from sometime. If the eurozone economy stabilizes, it will in turn stabilize global financial markets, but for the moment I think [the sector] will lose more jobs.""

Earlier this week ""Citigroup"":http://www.citigroup.com/ announced plans to exit the mortgage brokerage channel. ""Bloomberg News"":http://www.bloomberg.com/news/2012-02-01/citigroup-says-bank-plans-to-exit-mortgage-brokerage-business.html quoted spokesperson Mark Rodgers as saying that the decision may implicate 300 or more jobs at the company.

The move follows departures by other banks from the mortgage origination and servicing industry last fall.

Job numbers eased hopes for a steady housing recovery but ignited a rally on Wall Street that lifted stocks and shares for the nation's largest lenders.

The Dow Jones Industrial Average went up 1.23 percent to end the day in a surge to 12,862 points.

Stocks for ""Bank of America"":https://www.bankofamerica.com/ led the way with 5.23 percent in gains, closing shares by end of day for the mortgage company at $7.84.

Citigroup followed with a 4.85-percent pickup in stocks that closed shares for the bank at $33.54.

""Wells Fargo"":https://www.wellsfargo.com/ saw its shares climb to $30.63 on a lift in stocks by 2.44 percent, while ""JPMorgan Chase"":http://www.jpmorganchase.com/corporate/Home/home.htm ended the day on a 1.94-percent rise to $38.28 per share.