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Jobless Rate Dipped To 4.9 Percent In January

MARY LOUISE KELLY, HOST:

To the economy now and news that job growth weakened in January after a hiring spree by U.S. employers at the end of last year. But the monthly employment report out this morning also found that the unemployment rate edged down to 4.9 percent. That's good news, and NPR economics correspondent John Ydstie is here to talk about it. Hey, John.

JOHN YDSTIE, BYLINE: Hi, Mary Louise.

KELLY: Let's start with this slow down in job growth. What's driving it?

YDSTIE: Well, a couple of things. One is that these monthly numbers are subject to adjustment, and you really need to average the months. If you do that, job growth looks like it's on a pretty steady trend. In December, we had 300,000 - nearly 300,000 jobs added. Now we see 150,000 in January. Together, that's about a - 200,000 jobs a month, which is the long-term trend.

Now, one other reason is that January was a bit weaker, and it appears the economy slowed in the final months of last year to under 1 percent annual growth rate. That lower job growth in January may be reflecting that employers pulled back a bit on hiring workers because of a slow down in the economy.

KELLY: John, put this in context because this comes as we're, of course, seeing an overall economic slowdown.

YDSTIE: Yeah, this slowdown, I think, is a result of the oil bust, largely, and that's hurt the oil - U.S. oil industry and also manufacturing. And the slowdown in China and in other emerging markets has also hurt U.S. exports and manufacturing exports included. That said, a big surprise in this report is that manufacturing added almost 30,000 jobs, and given what's happened in manufacturing output, we'll see if that holds up.

KELLY: We've just got a second, John, but this unemployment rate, 4.9 percent, it's been a while since it was that low.

YDSTIE: That's right. The lowest rate since early in 2008 before the financial crisis. And another positive - stronger wage growth in January. That suggests the Fed may be more inclined to raise rates again sooner than economists expect.

KELLY: OK, that's NPR's John Ydstie. Thanks so much. Transcript provided by NPR, Copyright NPR.