A worker at a factory in Kfar Saba near Tel Aviv sews U.S. flags that were ordered ahead of President Barack Obama's visit to Israel March 12, 2013. REUTERS/Nir Elias The US unemployment rate fell to an eight-year low in January as the economy created fewer jobs than expected.

The Labor Department said Friday that the economy added 151,000 jobs in January and the unemployment rate fell to 4.9% from 5%.

Economists had estimated job gains of 190,000 and an unemployment rate of 5%.

Wage growth was stronger than expected. Average hourly earnings rose 0.5% month-on-month. And compared with January 2015, earnings rose 2.5% (2.2% estimated).

There was also a nice surprise from the manufacturing sector, which added 29,000 jobs last month, the most since August 2013. The sector has been hurt by weak global demand and the strong dollar in recent months.

Also, the labor-force participation rate rose to 62.7% from 62.6%.

Overall, and despite the month-on-month slowdown, it's a strong report that shows the labor market is still robust.

Markets are assessing how the Fed uses this data to update its assessment of the economy and make its next interest-rate decision in March.

"As regards policy implications, today's set of numbers should remind markets that a Fed March hike is not completely off the table," wrote Mohamed El-Erian, chief economic adviser at Allianz.

Before that meeting, the Fed would also have the February jobs report.

Friday's report includes the annual revisions to five years of jobs data, which raised the average pace of job gains in 2015 by 5,000 per month.

Via Bloomberg, here's what Wall Street was expecting: