WASHINGTON (MarketWatch) — The U.S. labor market is expected to show continued slow improvement in January but at a pace that continues to disappoint given the large number of unemployed workers. The U.S. economy has created an average of 128,000 jobs over the past three months. Economists expect a slight pickup in this pace in January. Economists polled by MarketWatch expect the economy created 155,000 jobs in January. The unemployment rate is expected to rise to 9.6%. The economy expanded at a 3.2% annual rate in the fourth quarter, faster than a 2.6% rate in the third quarter. But this is not leading to a surge in hiring. “I don’t see any data that points to expectation of more than what we’ve been getting,” said Ellen Zentner, senior U.S. economist at Bank of Tokyo Mitsubishi. In December, the economy created 103,000 jobs. The unemployment rate fell sharply to 9.4% from 9.8% in November, although much of the improvement was due to workers leaving the labor market instead of finding work. The December data was especially disappointing because market expectations for a healthy report soared when the ADP National Employment Report predicted that private-sector jobs increased by 297,000 in the month. The projection for January job growth fits in with the description of the economy in the latest policy released by the Federal Reserve last week. The Fed said that recent data “confirms that the economic recovery is continuing, though at a rate that has been insufficient to bring about a significant improvement in labor market conditions.” Labor market conditions are certainly in poor shape. There are 7.2 million fewer workers employed today compared to when the recession started. Four out of 10 unemployed workers have been unemployed longer than six months. More than four million have been out of work for more than a year. The composition of job losses suggest “the last 4 million jobs of the 7 million shortfall...will be challenging to get back,” said Zach Pandl, economist at Nomura Securities International. These include workers in the construction and real estate sectors, workers with a high school diploma or less, and workers unemployed for more than a year, Pandl said.