The U.S. economy created just 151,000 jobs in January, the latest sign that growth is slowing, though the unemployment rate fell to 4.9 percent.
Amid volatile financial markets and signs of contraction in manufacturing and corporate profits, the job engine slowed as well.
Friday's report comes a month after the Federal Reserve approved its first interest rate hike in nine years and as Wall Street speculation intensifies over what the central bank might do in the future. Fed officials have indicated a desire to hike rates as many as four times in 2016, though market expectations are for fewer or even no moves.
The Labor Department's report has "multiple flavors within the numbers that can satisfy both the hawks and the doves," said Tony Bedikian, managing director of global markets at Citizens Bank. "It doesn't really seem to provide fuel for faster Fed rate hikes, certainly based on the headline number and the relatively muted market reaction in interest rates and what's priced in to Fed expectations for the moment."
The U.S. was expected to create 190,000 jobs in January, compared with the 292,000 jobs reported a month earlier. The January number represents a sharp decline from December, which itself was revised lower from the originally reported 292,000 jobs to 262,000. November's number was revised higher, from 252,000 to 280,000.
One bright spot in the report was wage growth. Average weekly earnings rose 12 cents an hour or 0.5 percent on a monthly basis. The move translated to a 2.5 percent annualized increase. The average work week also ticked up to 34.6 hours.
"The unemployment rate ticked down, wages ticked up a bit. Net-net this is a good report for the economy," said Michael Arone, chief investment strategist for State Street Global Advisors' US Intermediary Business. "Although the top-line number is certainly lower than people we're expecting, we're coming off a couple months of 200,000-plus jobs, so a little mean reversion was expected."
The declining unemployment rate has been as much a function of people leaving the workforce as it has been increasing employment. However, the labor force participation rate edged higher to 62.7 percent. A broader measure of unemployment that includes those who are not looking for work or are working part-time for economic reasons held steady at 9.9 percent. The civilian labor force grew by 502,000 workers.
Retail led job creation, adding 58,000 positions, followed by bars and restaurants with 47,000. Health care contributed 37,000 and manufacturing added 29,000. Financial services grew by 18,000.
Private educational services declined 39,000 while transportation and warehousing lost 20,000.
This article first appeared on CNBC.com.