Friday Jobs Report: Good News for Wages, But Jobs Added Might Exacerbate Fed Fears

The U.S. economy added 151,000 nonfarm jobs in January, according to data from the Bureau of Labor Statistics released Friday. The unemployment rate stayed at 4.9 percent, down 0.8 percent. Sectors with the largest increases in employment were retail, which added 58,000 jobs, health care, at 37,000 new jobs, and manufacturing, with 29,000 hires. Notably, average hourly earnings for all employees increased by 12 cents in January to $25.39, a 2.5 percent increase since last year. The average workweek for private nonfarm employees increased by 0.1 hours. Allianz chief economist Mohamed El-Erian wrote in an email to Benzinga that the wage increase "suggests that the impressive jobs creation of the last few years may be finally translating into higher wage growth." El-Erian was bullish on the report, claiming its numbers revealed a strong jobs market. "It is important to look beyond the attention-grabbing job creation number. Specifically, keep an eye on the mix of hourly earnings, hours worked and the participation rate. They are all higher, pointing to solid internals in this January jobs report." El-Erian demurred, however, concluding with "today's set of numbers should reminds markets that a Fed March hike is not completely off the table." JP Morgan analysts agreed, and wrote that a "bad" jobs figure below 160,000 might exacerbate fears of a Fed rate hike in a market research note Friday morning. The market wasn't quite sure what to make of the data Friday. Gold investors weren't definitive on a reaction at first, then sold, sending the price of gold down to $1148.7 an ounce. The S&P reacted negatively immediately, spiking lower but showing signs of life.