Paul Davidson, USA TODAY
Employers added 157,000 jobs in January, and the unemployment rate ticked up to 7.9%, the government reported Friday.
The unemployment rate was 7.8% in December, and has now been above 7% for 50 straight months.
Economists had estimated the labor market added 155,000 jobs in January. ADP, a private payroll processor, estimated in a separate survey that private employers added 192,000 jobs.
The government said this week that the economy shrank last quarter for the first time since the recession, but the setback was mostly due to big defense cuts and slower product stockpiling by businesses.
Consumer and business spending has held up reasonably well despite the uncertainty created by the so-called fiscal cliff of automatic tax hikes and spending cuts that Congress and the White House partly resolved Jan. 1. Average monthly job growth of about 150,000 in the last few months of 2012 roughly matched the pace of the past two years.
Still, the fiscal-cliff deal required increasing payroll taxes - a move that fueled a sharp drop in consumer confidence last month and is likely to hurt Americans' spending power this year.
Expected federal government spending cuts in March would further dampen an economy that has grown at around a modest 2% pace since the recovery began in 2009.
Other forces, however, are offsetting the federal budget cutbacks. They include a recovering housing market that's making consumers feel wealthier, somewhat easing bank lending standards and ebbing fears about the European financial crisis.
Nigel Gault, chief U.S. economist of IHS Global Insight, expects monthly job growth of about 170,000 in 2013 - the most since the start of the recovery.