European Sales
Elsewhere, European retail sales unexpectedly declined in December, led by Germany and France, as unemployment at a 14- year high and government spending cuts sapped consumer demand.
Gains in U.S. employment last month were broad-based, including manufacturing, construction, temporary help agencies, accounting firms, restaurants and retailers.
Employment, overtime and hours worked in factories increased as manufacturers, who have been leading the two-year recovery, boosted production to rebuild inventories and meet global demand for their goods.
Assembly-line workers put in an average 41.9 hours of work each week, the most since January 1998, while overtime hours climbed to the highest since March 2007. Manufacturing payrolls increased by 50,000 in January, the most in a year.
Peoria, Illinois-based Caterpillar Inc., the world's biggest maker of earthmoving equipment, plans to hire more workers this year as it expands facilities, including in Victoria, Texas, and Winston-Salem, North Carolina, Chief Financial Officer Edward Rapp said yesterday.
"Those are the things that will lead to employment growth here," Rapp said in an interview with Betty Liu on Bloomberg Television's "In the Loop."
The unemployment rate, derived from a separate survey of households, was forecast to stay at 8.5 percent, according to the survey median. The drop in the jobless rate reflected a 381,000 decrease in unemployment at the same time 250,000 Americans entered the labor force.
Private payrolls, which exclude government agencies, rose 257,000 in January after a revised gain of 220,000 the prior month, marking the biggest back-to-back gain since March-April. It was projected to climb by 160,000.
Employment at service-providers increased 162,000, the most in four months, reflecting faster job gains in retail, transportation and leisure and hospitality.