Jobs report spurs mixed reactions

WASHINGTON — The U.S. economy added 151,000 jobs in January, a slowdown from recent months but still a sign of a solid job market. Employers raised pay, more people felt confident enough to look for work, and the unemployment rate dipped to 4.9 percent, its lowest level since 2008.

But investors focused on the job creation number after economists had been expecting growth in the 190,000 to 200,000 range. Stocks posted steep losses Friday, ending the week with broad declines.

Friday’s Labor Department report showed that the U.S. job market remains resilient even as the overall economy is struggling in areas such as manufacturing and facing severe weakness overseas. The report provides a key piece of evidence for the Federal Reserve, which is weighing whether to raise interest rates again in the face of global risks after lifting rates from record lows in December.

The January hiring gain, though modest, followed robust job growth of 280,000 in November and 262,000 in December.

Last month, companies cut education, transportation and temporary workers but stepped up hiring in manufacturing, retail and food services.

Aside from the slowdown in overall hiring, some economists were encouraged by most other aspects of the report.

“Positive job growth, the drop in the unemployment rate to 4.9 percent and the uptick in wages show the U.S. is heading in the right direction,” said Beth Ann Bovino, U.S. chief economist at Standard & Poor’s. Others weren’t so sure. “It’s a rather difficult report to interpret. It confirms there has been some deceleration in the U.S. economy. We’re not falling off the cliff, but it clearly shows the U.S. economy is not immune to the global slowdown,” said Russ Koesterich, global market strategist with asset manager BlackRock.

President Barack Obama said on Friday that the unemployment rate shows that his economic policies have succeeded.

“The United States of America right now has the strongest, most durable economy in the world,” Mr. Obama told reporters at the White House. “I know that’s inconvenient for Republican stump speeches, as their doom-and-despair tour plays in New Hampshire.”

Wall Street was not focused on the positives. The Dow Jones industrial average fell 211.61 points, or 1.3 percent, to 16,204.97. The Standard & Poor’s 500 index lost 35.40 points, or 1.9 percent, to 1,880.05 and the Nasdaq composite dropped 146.41 points, or 3.3 percent, to 4,363.14.

The number of people working or seeking work 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 percent.

With the unemployment rate now 4.9 percent, many workers have managed to gain raises because their employers have had to offer better incentives to compete for talent. The unemployment rate dipped in January even though a sizable 502,000 more people began hunting for jobs.

That reversed a trend in which the unemployment rate had been dropping because job seekers had stopped looking for work and were no longer counted as unemployed.

Average wages have jumped 2.5 percent over the past 12 months to $25.39 an hour, evidence that the past years of job growth are finally helping to generate pay raises — a crucial indicator for the Fed, which wants to see faster earnings growth.

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