The January unemployment rate rose 0.1 point to 7.9 percent, the U.S. Bureau of Labor Statistics reported Friday.
The climb is a public relations setback for the Obama administration, coming just two months after the rate fell to 7.7 percent in November -- the lowest since December 2008.
But the unemployment rate is affected by the number of jobs and the size of the workforce and in January both were changed.
The department said the economy added 157,000 jobs in January, about half the rate that economists say is necessary to bring down the unemployment rate.
In addition, 2.4 million were listed as marginally attached to the workforce, which is 366,000 fewer than January 2011, the department said.
That indicates that workers who have stopped looking for work are renewing job searches, which increases the size of the workforce and that means more people are listed as unemployed.
On average, the department said, 181,000 jobs were added to the economy per month in 2012, which is also too low to bring down the unemployment rate given the average number of people entering the workforce each month, economists say.
In January, retailers added 33,000 jobs, better than the 20,000 per month average added by retailers to the economy in 2012. The construction sector added 28,000 jobs in January. Healthcare added an additional 23,000.
Employment also increased in wholesale trade (15,000) and mining (6,000). But transportation and warehousing lost 14,000 jobs. Couriers and messengers lost 19,000 jobs, the department said.
Average wages rose by 4 cents to $23.78 per hours in January. Over the past 12 months, average hourly earnings have risen 2.1 percent, the department said.
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