Hiring looks like a rabbit, but expect job growth to shift into a slower pace soon. U.S. non-farm payrolls posted gains of more than 200,000 in December and January. That pace of hiring helped to bring down the jobless rate, which slipped to a nearly three-year low of 8.3%.

Can the labor markets maintain such hippity-hoppity vigor' It seems unlikely. The drags from the euro zone, housing and deleveraging are still weighing on growth prospects. Businesses will not need to add workers at a 200,000-plus monthly pace throughout all of 2012.

In fact, the strength in December and January payrolls partly reflect two temporary events.

First, unseasonably warm weather allowed more outside economic activity. Construction payrolls, which have been dropping since 2006, increased in December and January. Plus, the number of people who could not get to work because of bad weather last month was the lowest January total since 2006.

Second, businesses may have been catching up on their labor needs after they paused mid-year in response to production disruptions from the Japanese disasters and the uncertainty surrounding the debt-ceiling debate in Washington.

A longer-run look offers a truer reading of the labor market. The view shows a turtle’s slow-but-steady pace picture of improvement.

Over the past 12 months, the U.S. on average has created about 163,000 jobs a month. That’s the best 12-month showing since early 2007, before the recession.

If the economy continues to add jobs at that pace, the gain will be solid enough to bring down the jobless rate by the end of 2012.

But the decline will be choppy. Good job news will draw discouraged workers who have given up looking for work back into the labor pool. Their return will boost the unemployment rate, if only temporarily.

The latest job report also suggests the Federal Reserve may have to rethink its intention to keep the federal funds rate low until late 2014.

The Fed, however, will be slow to take away its very accommodative stance. Even a 7.5% unemployment rate at year-end [theoretically possible though unlikely] would signal a great deal of slack in the labor market, and thus inflationary pressures would remain weak.

What the January report says is that improving U.S. labor markets are making the recovery self-sustaining–if not particularly spectacular. Better job gains coupled with a small rise in wages are putting more money in consumers’ wallets to be spent or to repair household balance sheets.

The News Hub panel provides comprehensive coverage of the improving U.S. employment picture. The Labor Department reported 243,000 non-farm payroll jobs were added in January.

Note: This post updates the that column originally appeared as the Ahead of the Tape with the latest employment numbers.

Call it the case of the missing start-ups.

It isn’t small businesses so much as new businesses that typically power job growth during economic recoveries. Trouble is, that engine isn’t firing on all cylinders this time around. Even as the pace of company closings returned to normal, prerecession levels by the end of 2010, the formation of start-ups continued to lag behind. These were still 6.2% beneath prerecession levels, as a new St. Louis Federal Reserve study details.

The effect of this lack of business formations, or “births,” is particularly acute in January, as the jobs report out Friday showed. Because many firms fold at year-end, January typically records the biggest number of company closures, or “deaths,” of the year. Indeed, the adjustment made to account for these deaths subtracted 367,000 from the January payroll tally, in line with what has happened each of the past three years.

To be sure, that amount is subtracted from the unadjusted payroll figures, so the impact is lessened in the seasonally adjusted tally. Still, it is one reason economists caution against reading too much into January’s encouraging report. “It only takes a small [change to the unadjusted figures] to inflate the reported seasonally adjusted gain,” wrote MFR Inc. economist Joshua Shapiro in a note to clients.

“Such an outcome could be caused by significantly warmer/dryer weather than normal (certainly the case in many areas during the month) and/or an under-estimate of job losses by the ‘birth/death’ adjustment,” he noted. Indeed, the Labor Department “could still be understating the ‘death’ of businesses,” as it often does during times of economic distress, Mr. Shapiro cautioned.

The good news, at least, is that the annual benchmark revisions also released Friday showed job growth last year was better than first estimated. Even so, the U.S. economy grew less than 2% in 2011. It will take even stronger job gains on a sustained basis to boost growth and lower the nation’s still-high unemployment rate. In that regard, the sooner the start-up engine kicks in, the better.

Whenever the unemployment rate drops, economically savvy observers know to ask a key question: What happened to the employment-population ratio'

Under the government’s definitions, people only count as unemployed when they’re actively looking for work. So when the unemployment rate drops, it could mean that unemployed people found jobs, or it could mean that they gave up looking for work. The employment-population ratio, which measures how many people are actually working, is harder to fool.

Today’s jobs report carries good news on both fronts. The unemployment rate fell, and the employment-population ratio rose. That means the improvement in the labor market is real — people actually found jobs.

The employment gain wasn’t immediately obvious to some observers because of a quirk in this month’s report. Every January, the Labor Department readjusts its data to account for changes in the population. The tweaks are especially significant in years like this one that take into account a new decennial census.

This year, the population adjustment makes it look like the employment-population ratio didn’t change from December to January. In reality, the ratio improved by 0.3 percentage points. The gains were just masked by the population adjustments.

Here’s what happened: According to the Census Bureau, the civilian population grew by 1.5 million people in 2011. But the growth wasn’t distributed evenly. Most of the growth came among people 55 and older and, to a lesser degree, by people 16-24 years old. Both groups are less likely to work than people in their mid-20s to early 50s. So the share of the population that’s working is actually lower than previously believed. Taking that into account, the employment-population ratio went up. The unemployment rate wasn’t affected.

“There was not a big increase in discouraged workers,” economist Betsey Stevenson commented on Twitter. “What happened was Census found a bunch of old people we had assumed died.”

The adjustments had other effects, as well. They made drop in the number of unemployed look smaller than it really was, and the rise in the number of employed look bigger. And because the Labor Department doesn’t readjust its historical data to account for the new calculations, it isn’t possible to compare January’s figures on employment, unemployment and similar measures to those from earlier months.

Economists and others weigh in on the increase in jobs and drop in the unemployment rate.

–Our quick read through of today’s report shows that this is unquestionably a positive report in nearly every way. Average hourly earnings isn’t as strong as we’d like it to be but given the strength in other areas, we’ll put off our negativity for another day. Further, 206,000 people were unable to work due to weather; that is well below the average for January and could have had an effect on several sectors including construction. This could have put upward pressure on the overall number, making the report look better than it otherwise might have. In terms of the broader outlook, one report does not a trend make but there is little doubt that U.S. economic data continues to surprise on the upside. –Dan Greenhaus, BTIG LLC

–The details of the report were unambiguously positive, as employment gains were quite broadly-based, with jobs gains in construction (+21,000), construction (+50,000), trade and transportation services (+37,000), business services (+70,000) and leisure and hospitality (+44,000). Wage growth was also decent, as average hourly earning rose at a 0.2% month-to-month pace, while aggregate hours worked edging up 0.2% m/m. –Millan L. B. Mulraine, TD Securities

–This is a game-changer. Right on cue, with both jobless claims and small business activity back close to their Jan 11 level, payrolls have surged to the same pace recorded Feb-Apr 11… Downside is that if these numbers continue, unemployment will fall much further/faster than the Fed expects, so the chance of rates staying at zero through the end of 2014 is much smaller than they think. –Ian Shepherdson, High Frequency Economics

–Overall, we continue to believe that the labor markets are improving and should deliver stable job growth of around +150 thousand payrolls/month on average in 2012. January’s numbers appear to be above trend, but are based largely on statistical adjustments, leaving us somewhat less excited than the market seems to be. –Guy LeBas, Janney Montgomery Scott

–It’s hard to find much not to like in today’s jobs report. Strength is everywhere — headlines, details, revisions, and throughout both Establishment and Household Surveys. Last month’s “courier effect,” which originally inflated December with a quirky +42,000 rise in courier jobs, was revised away with updated seasonal factors (it’s now -7,000). But total December jobs are now reported at +203,000, not far from the 200,000 initial print. This makes the December performance look even more impressive. –Jay Feldman, Credit Suisse

–Payroll creation is on a rising trend, which is reinforced by upward revisions to the last two months. Hours worked, especially in manufacturing, are rising at a strong pace (the 1.2% increase in manufacturing hours points to a very robust industrial production report for January) and payroll gains have been broad-based. We believe that consensus expectations for growth are understating the rising momentum in the economy.–RDQ Economics

–The overall employment situation is improving and manufacturing is leading the way. In January, manufacturing employment was up 50,000 and mining employment was up 9,000. The multiplying impact of producing more is seen in the 11,3000 rise in wholesale employment for durable and nondurable goods and the 13,100 increase in transportation employment — of which 8,000 was water and truck transportation. Whereas employment in information services and financial activities was down 18,000 — accounting and bookkeeping services was up 12,500 and temp services were up 20,000. While the number of people necessary to build a widget isn’t what it was, the increase in the number of widgets produced does translate into more jobs for those that get widgets to the wholesale market, sell them there, and account for the number produced and sold. –Steven Blitz, ITG Investment Research

–The strengthening in the January payroll count could stoke expectations that economic growth is accelerating, but we remain cautious. Consumer confidence, income, and spending remain lackluster and while hiring may be picking up, the paychecks that go with it are not. For this to mark an upturn in the labor market, then businesses will have to continue to hire on this scale throughout the winter. If that unfolds, it would be a great start to the new year, provided the volatile pattern of growth seen over the past three years finally gets muted. –Kathy Bostjancic, The Conference Board

–Particularly promising is the pick up in hours worked which rises to 34.5 from 34.4 — worth an additional 400,000 in terms of earned income. The only sectors that decline are information (-13,000) and financial activities (-5,000). Education and health continues its strong run (36k), leisure and hospitality (44,000) starts the year strongly with manufacturing (50,000) also showing promise. –David Semmens, Standard Chartered Bank

–The January employment report is a blow-out number. It is strong in virtually every way that it could be. The data through January is not enough to definitively conclude that the economy has turned the corner (we had a similar spurt in payrolls and drop in the jobless rate about a year ago that quickly dissipated), but the labor market has very clearly improved. Moreover, the Fed’s assessment of the economy has proven, for the moment at least, to be egregiously too pessimistic. To be sure, even relative optimists like me did not see this coming, and there will undoubtedly be further twists and turns on the road to economic recovery. –Stephen Stanley, Pierpoint Securities

–Now it becomes critical to see if the consumer spends or boosts saving from 4% to 4.5%. I think the data is distorted somewhat by the sharp weather swings between this year and last but this could take a couple of more months to correct. The claims data does, however, suggest that the payrolls should be growing by 175,000 per-month instead of last year’s 125,000. –Steven Ricchiuto, Mizuho Securities

–We would nonetheless caution that January results are dominated by the seasonal adjustment process and therefore we would not rush to extrapolate the rates of gain reported today. For instance, the unadjusted change in payrolls in the month was -2,689,000, which translated into the aforementioned +243,000 after seasonal adjustment. So, it only takes a small miss by the seasonal to inflate the reported seasonally adjusted gain. Such an outcome could be caused by significantly warmer/dryer weather than normal (certainly the case in many areas during the month) and/or an under-estimate of job losses by the “birth/death” adjustment. Although that statistical measure makes a large negative adjustment to the non-seasonally adjusted payroll figure in January (-367,000, or almost 14% of the reported decline in total payrolls), there is no guarantee that it is accurate, and in times of economic distress it could still be understating the “death” of businesses. –Joshua Shapiro, MFR Inc.

–Expectations for 2012 have been for more modest employment growth, below levels seen in 2011. The weights and threats to the recovery remain in place, including weak fiscal conditions, the expected increase in home foreclosures, the European debt crisis and slowing global growth. However, the very strong start to the year may also indicate that the U.S. economy is more resilient to these threats than we believe. –Sophia Koropeckyj, Moody’s Analytics

–If you are simply taking a snapshot of this payroll report, it would be difficult to characterize it as anything but a good one – unless you have an axe to grind. This certainly doesn’t sound the all clear on the economic backdrop as the well advertised headwinds remain in place, but if you had your pick to see one economic variable show real improvement, it would unquestionably be this most foundational report. While this report is not a definitive game-changer in terms of our outlook for growth, it is certainly a step in the right direction. In terms of the internals of the report, everything you would want to be up was up. –Tom Porcelli, RBC Capital Markets

Dig into an interactive summary of economists’ forecasts for the coming year from the latest WSJ.com survey.

According to one little-followed measure, the economy created nearly 500,000 jobs last month — about twice as many as the government’s official figure of 243,000.

To gauge employment, the Labor Department uses two separate surveys. The jobs figures come from establishment payrolls, while the unemployment rate comes from a survey of U.S. households.

But the Labor Department also releases jobs figures from the household survey that it has adjusted (by subtracting farm workers and so on) to reflect the same sort of jobs the establishment survey covers. By this count, the economy added 491,000 jobs last month.

In fact, the household gauge shows that the economy didn’t erase quite as many jobs in the recession as the establishment survey did, and that there’s been a significantly stronger rebound in employment. But why'

Both of the Labor Department surveys have downsides. The sample size for the household data is much smaller than the establishment figures, for example. But the establishment figures can’t always keep up with shifts in the makeup of U.S. businesses. So economists generally think the establishment figures are better, but sometimes argue that the household ones are better at picking up turning points in the labor market.

There could be other reasons for the mismatch, a 2009 paper by economists Katharine Abraham and John Haltiwanger at the University of Maryland, Kristin Sandusky at the Census Bureau and James Spletzer at the Labor Department suggests.

Analyzing a data set that allowed them to match people in the household survey with people on employee payrolls from 1996 to 2003, the economists found “substantial discrepancies” between the two.

Some 6.4% of people who showed up as holding jobs on employee records were recorded as unemployed in the household survey. Many of them were 65 and older — which suggests they were people who considered themselves retirees even as they continued to draw some sort of paycheck. An even larger 17.6% of people who counted as employed in the household survey didn’t show up on employee records. Many of them had demographic characteristics, such as low education levels, that suggested they were working off the books.

The economists also found that from 2001 to 2003 — the period that covers the brief recession and the jobless recovery that followed it — the number of people on employer records who counted in the household survey as unemployed declined. But the number of people who didn’t show up on employer rolls but who were counted in the household survey as employed rose. That’s a pattern that might be repeating itself, with fewer senior citizens taking jobs here and there to round out their retirement income, and more people getting paid under the table.

Fewer Americans are being laid off than in previous months as the labor market strengthens. The number of workers filing new claims for unemployment benefits—an indicator of the pace of layoffs—fell by 12,000 last week to a seasonally adjusted 367,000. That’s well below the 400,000-plus new claims filed weekly in the summer and early fall. As the economy has shown signs of firming, employers have become more confident and stepped up hiring.

The goal of the 2010 Dodd-Frank financial law isn’t to wipe failure from the face of the U.S. financial system, Treasury Secretary Timothy Geithner said Thursday at a rare press conference.

His observation was in response to a question about what more U.S. regulators could have done to prevent the collapse of MF Global Holdings Ltd., which was the subject of yet another investigative hearing on Capitol Hill Thursday.

It is important to note, Mr. Geithner said, “we are not attempting to design a financial system that takes out the risk of failure of individual firms who make mistakes… take too much risk. That is not possible and it’s not desirable.”

Unless, of course, you want a system “run by the government, and we’re not prepared to do that,” he added.

Rather, the aim of Dodd-Frank is to make the system more resilient when such failures occur.

“We are trying to make sure that the largest institutions whose failures can cause so much damage to the innocent are forced to run much more conservatively,” Mr. Geithner said, having ticked off the “very, very substantial” amounts of new capital banks had to raise along with the tougher limits on risk-taking and higher liquidity standards they face.

Mr. Geithner called the new regulations being imposed on the U.S. financial industry “tough,” but claimed that the “necessary and fundamental restructuring” that the U.S. has forced on the banks and other financial firms is already paying off with the financial industry contributing to, rather than dragging down, economic growth. He noted the 30% increase in private investment in equipment and software, the falling cost of credit since the height of the crisis and the increase in industrial loans over the past six months.

He added: “We’re in a much better position today because of these reforms. Just look at the ease with which, for example, the American financial institution is helping to compensate for, fill the gap left by, the substantial withdrawal from credit that European banks being forced to undergo” because of the euro zone crisis.

By Alan Zibel and Jeffrey Sparshott

Treasury Secretary Timothy Geithner defended the Dodd-Frank financial-overhaul law against mounting attacks on Thursday, the latest in a series of moves by the Obama administration to push ahead with its signature Wall Street overhaul.

“Those who are still working to delay and weaken reforms will only increase uncertainty and damage our efforts to get the rest of the world to adopt a level playing field,” Mr. Geithner said in a briefing with reporters.

He added that there was no evidence that repealing the law would help the economy, as Republican candidates for the GOP presidential nomination have argued.

Mr. Geithner pledged to lay out more detail on the administration’s approaches to reforming the U.S. housing finance system over the spring. He said the Treasury would be exploring potential legislation on with top House and Senate leaders on financial issues.

“Realistically, we don’t expect to legislate this year,” he said. “We think that is going to take a little bit more time. We could be surprised, but I think that is unlikely.”

Republicans have criticized the Obama administration for only laying out a set of options nearly a year ago to overhaul the nation’s housing-finance system and replace Fannie Mae and Freddie Mac, the government-controlled mortgage finance giants.

Mr. Geithner, speaking a day after President Barack Obama announced a new push for legislation to enable millions more U.S. homeowners to refinance their home loans, said the Treasury Department expects U.S. housing regulators, the Federal Housing Finance Agency and the Federal Housing Administration, to announce steps to remove barriers to refinancing.

“They are making some progress, and we expect those two agencies to be in a position to outline additional reforms in the coming weeks,” he said. Mr. Geithner also said regulators are looking “very carefully” at ways to provide principal write-downs for borrowers who owe more on their mortgages than their homes are worth.

The Dodd-Frank financial-overhaul law, passed in summer 2010, is meant to prevent a repeat of the 2008 financial crisis by reducing the threat of “too-big-to-fail” companies, or financial entities whose collapse would wreak such havoc on the broader economy that the government would have to bail them out.

Regulators still are writing dozens of new rules stemming from the law, and 2012 is an important year for finalizing and applying them. Critics on Wall Street and in the Republican party have blamed Dodd-Frank for holding back the economy and weighing down businesses with onerous new rules.

Mr. Geithner said he expects key elements of the new law to be in place this year. U.S. regulators plan to bring the first nonbank financial institutions under new regulations mandating greater capital cushions and limiting risky behavior. The rules for nonbanks–hedge funds and insurance companies, for example–are a pillar of the law.

The Treasury secretary also touched on a host of other new rules. Money-market funds soon will face new rules meant to prevent a run, as happened in 2008, Mr. Geithner said. In addition, new rules that would protect customer accounts at trading firms, a problem made clear by the collapse of futures firm MF Global Holdings Ltd. are also in the works, Mr. Geithner said. He noted that the firm’s failure “illustrates that we have some work to do ahead.”

President Obama, in last week’s State of the Union address and in the ensuing days, has mounted an aggressive defense of his administration’s efforts to overhaul the financial system. In the State of the Union, Obama pledged, “I will not go back to the days when Wall Street was allowed to play by its own set of rules.”

However, Republican candidates for the presidential nomination repeatedly have blasted the Obama administration over the law, and said they would get rid of it if elected.

“I would repeal Dodd-Frank tomorrow morning; we would see the economy start to improve overnight. Dodd-Frank has let the biggest banks get bigger while crushing independent banks,” candidate Newt Gingrich said in an interview with the Las Vegas Review-Journal ahead of Nevada’s Republican caucuses.

Rival candidate Mitt Romney told the newspaper: “I will repeal the Dodd-Frank legislation, which is harming local banks and hurting credit creation right when we need it most.”

“More factory workers!” It’s one campaign slogan Democrats and Republicans agree on. There’s just one problem. U.S. factory jobs have been on a structural downtrend, and government policy can’t change that.

Manufacturers are using productivity, not extra labor, as the means to boost their output level. American labor is expensive when compared to that of emerging markets. The only way U.S. manufacturers compete globally is by reducing the number of workers who handle their products.

Of course, most factories don’t run worker-free, and factory payrolls have rebounded a bit since the depths of the recession when companies of all stripes slashed payrolls.

But even the recent hiring doesn’t come anywhere close to the rebound in output which has been lifted by export and domestic demand.

According to Thursday’s Labor Department report on fourth-quarter productivity, manufacturing output has bounced back 15% since its recession low in 2009. Productivity, however, accounted for almost all of the output gain, rising 10.7%. Longer work time accounted for almost all the rest. The level of jobs was virtually flat.

Greater efficiency has allowed unit labor costs to plunge. Cost reduction, in turn, has kept a lid on selling prices, enabling U.S. producers to compete in global markets and defend their share of domestic spending.

Politicians, such as U.S. President Barack Obama and Rick Santorum, are trying to resurrect the days when factory jobs became the stepping stone to the middle class.

Millions of workers graduated from high school and found work immediately at factories. They produced the nation’s machinery, steel, and textiles. They earned enough to buy U.S.-made clothing that supported even more factory jobs.

Starting in the 1980s, that economic model was dismantled by global competition, technological change and the obsolescence of some industries. The number of American factory jobs have shrunk from a peak of 19.4 million in 1979 to just 11.7 million in 2011. Manufacturing now accounts for only 8.9% of all payrolls, down from 21.6% in 1979.

U.S. high schools, however, still graduate millions of men and women who do not go to college and need to find work that pays a middle-class salary.

Some of them will find work in the industrial sector. Even Friday’s payroll report could show a gain in factory jobs. After all, the U.S. is still a manufacturing powerhouse. But the fuel of that engine is mainly productivity.

Pinning our economic future on a revival in manufacturing jobs is foolhardy. The U.S. needs to provide training so that the vast majority of new workers find well-paying jobs off the factory floor.

A roundup of economic news from around the Web.

–Long-Term Unemployment: The Pew Charitable Trusts posts five questions and some great charts on long-term unemployment. “Pew’s analysis of unemployment data from the fourth quarter of 2011 reveals that 4.0 million jobless workers were without work for a year or more, slightly more than the population of Oregon. That represents 2.6 percent of the labor force and 31.3 percent of the unemployed. While these numbers have come down from their Great Recession peaks, they are still higher than in any previous recession since World War II. “

–Exports: Menzie Chinn looks at the contributions of exports to growth. “So while GDP is less than a percentage point above 2007 levels, manufacturing output is 2% above. This is notable given the trend decline in real manufacturing to real GDP. Hence, I think that a continued decline in the dollar’s value conjoined with continuing productivity growth will induce rebalancing toward greater manufacturing value added – both by way of greater exports and fewer imports. To the extent that wages in manufacturing tend to be higher than in retail and distribution, the spillover effect from higher manufacturing output might be disproportionate.”

–Groundhogs vs. Economists: Prakash Loungani asks whether groundhogs make better forecasters than economists. “Feb. 2 is Groundhog Day. Legend has it that if the groundhog — Punxsutawney Phil — casts a shadow that day, six weeks of winter lie ahead. No shadow and the forecast is for an early spring. Statistical records suggest the groundhog has been right about 40% of the time. Are we headed for economic spring or winter' If past performance is any guide, we might be better off asking groundhogs than economists.”

Compiled by Phil Izzo

U.S. factories expanded their production in January as companies restocked shelves. The Institute for Supply Management’s manufacturing index rose one point to a seasonally adjusted 54.1 from December, marking the 30th consecutive month of increased factory activity. Readings over 50 indicate expansion. Manufacturers’ backlogs and new orders also jumped, signaling that production will keep rising in coming months.

In the nation’s worst-off states, more than one in five residents wanted a job and were unable to find one last year.

Unemployment nationwide averaged 8.9% in 2011, but the rate still hovered in the double-digits in states such as Nevada and California. Expanding the rate to include those who wanted to work but gave up their hunt provides an even darker picture: In each of those states the broader measure of unemployment topped 20%, according to a Labor Department report.

The rate, known as the U-6, is designed to measure underutilization in the labor market and includes jobless workers, those who want a job but have given up searching and those who are working only part-time because they can’t find full-time positions.

States that have high unemployment rates unsurprisingly also have bigger U-6 rates, but looking at the differences between them can give us some insight in the way that individual states are struggling.

For example, Hawaii, Montana and Idaho all have jobless rates below the national average — 7.3%. 7.3% and 8.7%, respectively — but they have a bigger disparity among their U-6 rates — 15.1%, 15.3% and 16.1%, respectively — than the national average. That indicates that underemployment is a bigger problem in those states.

The Labor Department also has other measures of unemployment, and tracking differences there can also illustrate issues in the states. Michigan, New York, and South Carolina all have big gaps between their main rates and the rate that tracks just discouraged workers. That indicates there are more workers marginally attached to the labor force in those states.

Welcome to the January Thaw.

During the fourth-quarter, much of the data surprised on the upside. Hopes built that the recovery had finally gained much-needed momentum. Real gross domestic product could put together back-to-back above-par growth rates; Monthly job gains would rise to a 200,000 sustained rate.

The early-2012 data melted those hopes. The numbers haven’t been disastrous. The economy is growing and businesses are hiring. But the near-misses on expectations confirm headwinds still hobble growth. Expect “moderate” and “modest” to be the primary adjectives to describe growth.

The latest data disappointments include a drop in consumer confidence and factory activity growing slower than expected. The more tepid January numbers shouldn’t be a surprise.

Better-than-expected fourth-quarter numbers were in part a payback to the wait-and-see attitude companies took during the summer’s political wrangling over the federal debt-ceiling limit.

In addition, December benefited from warmer-than-normal temperatures that pulled ahead outside activity that might have been delayed until spring. For instance, construction spending jumped 1.5% in December — surely an anomaly given the overhang of housing and financing difficulties that have plagued the industry.

January numbers look weak in comparison but they shouldn’t be seen as worrisome to the outlook. The problem is that obstacles — from housing to the euro-zone debt crisis — are fighting against the economy building up a full head of steam.

The January downshift will probably carry over to Friday’s jobs report.

“A number of weather and seasonal factors were at play in the last payroll employment report and a partial reversal of these factors in January clouds the outlook of jobs,” says Steven Ricchiuto, chief economist of Mizuho Securities.

On Wednesday, Automatic Data Processing Inc. said the private sector added 170,000 new jobs, less than the 292,000 created in December. Because the ADP number was spot on expectations, economists haven’t changed their forecasts for the government’s tally of nonfarm payrolls.

The median number is a January gain of 125,000, unspectacular when compared to the 200,000 added in December. The expected increase is not fast enough to bring down the jobless rate. It’s expected to stay at a high 8.5%.

The manufacturing sectors in most of the world improved last month, though many regions, especially in Europe, remained in contractionary territory.

China’s factory sector continued to expand, easing fears of a hard landing there. Meanwhile Germany and Austria moved back into growth territory, even as much of the rest of the euro zone was shrinking, though at a slower pace.

U.S. manufacturing continued to post steady expansion, growing even further in January. “Manufacturing is starting out the year on a positive note, with new orders, production and employment all growing in January,” said Bradley J. Holcomb, chair of the Institute for Supply Management Manufacturing Business Survey Committee, which compiles the U.S. numbers.

See a sortable chart of manufacturing activity, by country.