U.S. Unemployment Rate Hits Lowest Level Since February 2008

WASHINGTON (AP) — U.S. employers added 151,000 jobs in January, a sharp deceleration from recent months as companies shed education, transportation and temporary workers.

The Labor Department said Friday that the jobs gains were still enough for the unemployment rate to fall to 4.9 percent from 5 percent, reaching the lowest level since February 2008. The January figures follow seasonally adjusted job growth of 262,000 in December and 280,000 in November.

The slowdown reflects an increasingly muddled picture for the U.S. economy. Global financial pressures and a volatile stock market have curtailed growth. But January’s jobs report appears to have further clouded the economic outlook as it showed that consumers are faring better despite steep declines in several industries.

Consumers appear to be resilient, even as sectors of the economy seemingly insulated from the slowdown in China, downturn in Brazil and fragility in Europe slipped.

Average wages jumped 2.5 percent over the past year to $25.39 an hour, evidence that the past years of job growth are helping to generate larger pay raises. The income growth meshes with retailers hiring a seasonally adjusted 57,700 workers. Restaurants and bars added 48,800 jobs in a sign of robust consumer demand.

With low gas prices leaving more money in consumers’ wallets and borrowing costs low, most economists expect Americans to spend at a decent pace this year and bolster economic growth.

Manufacturers hired a solid 29,000 workers last month, even though other indicators show factory activity weakening as the rising value of the dollar and the sluggish economies of major trade have squeezed exports of U.S. goods. The Institute for Supply Management’s manufacturing index has been below 50 for four months, signaling contraction. Orders for factory goods plunged in 2015 — the first annual drop since 2009, when the economy was just emerging from recession.

But other sectors of the economy hit a speed bump in January.

Education services — an area sheltered from the global economy— let go of 38,500 workers after steady gains in prior months.

The transportation and warehousing sector downsized by 20,300, likely letting go of seasonal workers after the holiday shopping rush ended. The U.S. Postal Service also parted with 6,000 jobs.

Yet the most notable decline was in temporary workers, whose ranks fell by 25,200 in January. The decrease could indicate that companies are wary that the economy can continue its 6 ½-year expansion at its previous pace. Corporate profits are declining and goods are piling up on warehouse shelves.

Those trends have elevated concern that a U.S. recession may loom in the next year or two.

Most analysts say that while the economy may slow this year compared with 2015, an outright recession remains unlikely. Economists at Bank of America Merrill Lynch have put the odds of a recession within the next 12 months at 20 percent. While still low, that estimate is up from 15 percent last year.

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