Following a 262,000 job gain in December, the economy generated 151,000 jobs in January. While employment growth came in a little below expectations, the main takeaway from this jobs report is more relief than disappointment. Overall, the message from the labor market is more positive than the one from the GDP numbers, partly reflecting ongoing weak productivity growth.

Part of the slowdown in job growth in January is a bounce back from the blistering pace of job creation in the fourth quarter, which was clearly above trend. The trend of job growth is likely to lead to solid household spending moving forward.

The labor market continues to tighten with the unemployment rate declining to 4.9 percent on its way to 4.5 percent by year's end. And this report provides more evidence of wage acceleration, with year-over-year growth in average hourly earnings reaching 2.5 percent.