Job growth slowed, notching nearly half the gains of December. But the unemployment rate fell, and wages bounced back strongly. Fred Katayama reports.
Slowdown in the pace of job growth. The U.S. economy added 151,000 jobs in January. That was much less than expected and nearly half that of the gains in December, when unusually warm weather fueled growth in construction jobs. The previous two months' job increases were revised slightly downward. But the unemployment rate fell to 4.9 percent. And wages bounced back sharply, up half a percent from a year ago. Conference Board labor economist Gad Levanon: "My takeaway from this report is more relief than disappointment. I think you know, some pullback was expected after a very strong growth in jobs in the fourth quarter." Another plus: the weak manufacturing sector produced twice as many jobs as in December. The biggest gains came from services, led by retail, food services, and healthcare. The top losers: educational services, transportation, especially couriers after the end of the holiday shopping season, and mining, amid the sharp drop in oil prices. Levanon thinks these numbers leave the Fed open to several more rate hikes. SOUNDBITE: GAD LEVANON, MANAGING DIRECTOR OF LABOR MARKETS, CONFERENCE BOARD (ENGLISH) SAYING: "I'm actually thinking that the market is underestimating hikes for the rest of the year. I wouldn't be surprised if we see two or maybe even three more hikes in 2016." Fed policy makers next meet in March, which means they'll be able to digest two more jobs report before making a decision on interest rates.