The U.S. economy created just 151,000 jobs in January, the latest sign that growth is slowing, though the unemployment rate fell to 4.9 percent.
Amid volatile financial markets and signs of contraction in manufacturing and corporate profits, the job engine slowed as well. Despite the disappointing jobs number, wages grew and more Americans joined the labor force.
"This is the first time that the unemployment rate has dipped below 5 percent in almost eight years," President Barack Obama said in an afternoon speech touting the jobs report. "Americans are working. All told, over the past years our businesses have added 14 million new jobs. Seventy-one straight months of private sector job growth extends the longest streak on record."
Friday's report comes a month after the Federal Reserve approved its first interest rate hike in nine years and as Wall Street speculation intensifies over what the central bank might do in the future. Fed officials have indicated a desire to hike rates as many as four times in 2016, though market expectations are for fewer or even no moves.
The Labor Department's report has "multiple flavors within the numbers that can satisfy both the hawks and the doves," said Tony Bedikian, managing director of global markets at Citizens Bank. "It doesn't really seem to provide fuel for faster Fed rate hikes, certainly based on the headline number and the relatively muted market reaction in interest rates and what's priced in to Fed expectations for the moment."
The U.S. was expected to create 190,000 jobs in January, compared with the 292,000 jobs reported a month earlier. The January number represents a sharp decline from December, which itself was revised lower from the originally reported 292,000 jobs to 262,000. November's number was revised higher, from 252,000 to 280,000.
One bright spot in the report was wage growth. Average weekly earnings rose 12 cents an hour or 0.5 percent on a monthly basis. The move translated to a 2.5 percent annualized increase. The average work week also ticked up to 34.6 hours.
President Barack Obama