Unemployment rate declines

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Friday, Feb. 6, 2004 | 11:03 a.m.

WASHINGTON -- The U.S. economy added fewer jobs than forecast in January, restrained by a decline in factory employment. The jobless rate declined to 5.6 percent.

Payrolls rose 112,000 during the month, the Labor Department said today. While the gain last month was the most in three years, payrolls rose an average 196,800 a month during the record 10- year expansion that ended in March 2001. Federal Reserve policy makers said they will be "patient" before raising interest rates, noting "subdued" job creation.

"To have a sustained economy we must have more than 110,000 jobs created a month," said Alan Blinder, a Princeton University economics professor and former Fed vice chairman. Companies "are strangely hesitant to hire given the strong growth in the economy."

More job growth may be needed to raise incomes, which would help boost spending.