U.S. nonfarm payrolls grew by 146,000 in January, but short of the 200,000 new jobs that economists had forecast.

As well, the U.S. Labor Department downwardly revised data in the prior two months: estimates of job growth in December and November were marked down by a net 29,000 jobs.

A shortage of opportunity appears to have led many unemployed workers to suspend their search for new jobs. The labor-force participation rate skidded to 65.8%, its lowest level since 1988, from 66% in December and 66.1% in November.

With fewer unemployed workers on the hunt for new jobs, the unemployment rate slid to 5.2%, more than a full percentage point below a peak of 6.3% in June 2003, from 5.4% in December.

The January report showed a split in hiring between the manufacturing and service sectors of the economy. While the service-providing industry added 177,000 jobs, including the addition of 19,000 retail jobs after a loss of 8,000 jobs in December, manufacturing payrolls declined by 25,000 — the fifth straight month in which the factory sector shed jobs.