Winter weather slowed U.S. job growth last month, though the unemployment rate still fell to an eight-year low and wages rose for workers.
Nonfarm payrolls rose by 151,000 jobs in January, following revised gains of 262,000 in December and 280,000 in November, the Labor Department said Friday. The unemployment rate dropped to 4.9%, the lowest since February 2008.
Economists polled by Reuters had forecast employment increasing by 190,000 in January and the unemployment rate remaining at 5% from the month before.
“I don’t think 151,000 jobs added last month takes a Fed rate hike off the table this year, but it probably does push the next one off until June at the earliest,” Bank of the West chief economist Scott Anderson told the New York Times.
In other encouraging news for workers, the average workweek for all employees on private nonfarm payrolls rose by 0.1 hour to 34.6 hours in January. The manufacturing workweek edged up by 0.1 hour to 40.7 hours, and factory overtime was unchanged at 3.3 hours. The average workweek for production and nonsupervisory employees on private non farm payrolls was unchanged at 33.8 hours.
In January, average hourly earnings for all employees on private nonfarm payrolls increased by 12 cents to $25.39. Over the year, average hourly earnings have risen by 2.5%. In January, average hourly earnings of private-sector production and nonsupervisory employees rose by 6 cents to $21.33.
“The headline number was a bit of a disappointment but not too bad, and the rest of the report suggests steady improvement,” Michael Hanson, a senior economist at Bank of America Merrill Lynch, told the NYT. “The financial markets are leery, but the labor market still looks like it’s continuing to grow.”
Barclays’ chief U.S. economist Michael Gapen said his team doesn’t think the economy is sliding into a recession, but rather the unemployment rate will continue to drift lower, which should support further wage growth.