US added just 151k jobs in Jan.; unemployment at 4.9 pct

In terms of other measures of labor underutilization, the number of long-term unemployed was unchanged at 2.1 million, and has remained largely unchanged since June, while the number of workers employed part-time for economic reasons was little changed last month at 6 million, but down by 796,000 for the past 12 months.

That drops the unemployment rate to 4.9 percent – the lowest it has been since early 2008.

The first measurement in 2016 of the USA labor market was tepid, but the soft numbers overshadowed several otherwise positive signs for workers and the economy.

Average hourly earnings rose by 0.5 percent in January, 2.5 percent over the past 12 months.

Most analysts say that while the economy may slow this year compared with 2015, an outright recession remains unlikely.

The robust growth exhibited over the last half year was not present in the Bureau of Labor Statistics’ (BLS) latest jobs report, leading some observers to predict the economy is in a cooling off period.

The pace of employment gains slowed in January from the torrid pace of the previous three months. According to Indeed’s search engine, manufacturing job listings are plateauing, a forward looking indicator that could spell serious concern for that sector in the coming months. The Dow is down 175.69 points or 1.1 percent at 16,240.89, the Nasdaq is down 106.29 points or 1.4 percent at 4,403.27 and the S&P 500 is down 27.86 points or 1.5 percent at 1,887.59. In fact, Fed policy makers suggested that labor markets were gaining so much momentum that the central bank would probably be able to raise rates a total of four times in 2016, moving USA monetary policy that much closer to ‘normal’.

The services sector added 118,000 jobs, down from 197,000 in January.

“The fed funds futures market apparently wrote off a March rate hike before this report”, Duncan said.

Economists say they don’t have high hopes for any major revelations from Yellen next week.

Minimum-wage legislation “may have boosted average hourly earnings a little bit for the month, but minimum wage jobs and other categories that are associated with that are still a relatively small component of the distribution of employment”, said Russell Price, a senior economist at Ameriprise Financial in Detroit. There’s always churn – labor-market friction, with people switching jobs – as well as structural mis-matches – unskilled workers or those with poor work histories who have trouble finding anything, and positions requiring specific skills or credentials that employers have trouble filling.

On the employment front, CBO expects nonfarm payroll employment to continue increasing over the next few years, but more slowly than it did in 2015.

Watch for revisions: The monthly jobs figures always come with significant uncertainty – the headline payroll figure has a margin of error of about 100,000 jobs – but that’s especially true in January.

The number of people working or searching for jobs rose last month, while the number of unemployed slipped from 7.9 million to 7.8 million, which caused the unemployment rate to dip from 5.0 percent. It’s a point of equilibrium where most workers can find the jobs they want and are qualified for, and most employers can find the workers they need.

While employment at temporary-help agencies and couriers declined in January following a ramp-up ahead of the year-end holidays, the labour market showed strength elsewhere.