US job creation slows

The US jobless rate dropped below 5 percent last month for the first time in eight years, the Labor Department said on Friday.

Based on a survey of households, the unemployment rate slipped to a seasonally adjusted 4.9 percent, down from 5 percent in December and 5.7 percent in January 2015.

At the same time, the number of new jobs created by employers showed a decline, with the number falling to about 151,000 from an average of 271,000 in the previous two months.

The weaker pace of hiring in January followed a late 2015 slowdown in the US economy, with the world's largest economy expanding at an annual rate of just 0.7 percent in the October-December quarter.

While the weak jobs growth could raise concerns over the state of the US economy, it could also further undermine the case for a Fed interest rate hike in March, following the central bank's rate increase in December for the first time in nearly a decade.

Not a trend?

However, economists were hesitant to declare the one-month's hiring slowdown a trend. "Today's numbers are about momentum, so while 151,000 new jobs in January is below expectations and off pace from prior months, the data shows America's recovery is continuing," Beth Ann Bovino, US chief economist at Standard & Poor's Ratings Services, told AFP news agency.

"Amid all the global economic turmoil and domestic market gyrations, positive job growth, the drop in the unemployment rate to 4.9 percent, and the uptick in wages show the US is heading in the right direction," she said.

Despite the fall in jobless rate, the total number of unemployed persons - at 7.8 million - was only slightly better from December. And the number of long-term unemployed as well as the number of people working part-time were both little changed.

Data released on Friday also showed the US trade deficit bulged in 2015 as a result of the slowing global economy.

For all of 2015, the trade gap in goods and services widened 4.6 percent from a year ago to $531.5 billion (477.3 billion euros) as the fall in exports outpaced the decline in imports, the Commerce Department said.

The politically sensitive goods trade gap with China swelled to a new record last year at $365.7 billion as a strong dollar made imports cheaper, while at the same time weighing on demand for US exports.

sri/hg (dpa, AFP, Reuters)