The terrible December jobs report

January 10, 2014

The jobs report is out today, and it’s weak. The economy added 74,000 jobs in December — the lowest growth the economy has seen since January 2011 and far below the expectation of 196,000. Because of people dropping out of the labor force, the unemployment rate dropped to 6.7% from 7.0% in November. Here’s Reuters’ chart of U.S. non-farm payrolls over the last year:

One theory of why the job growth number was so weak in December, put forth by a number of people including Felix Salmon, is because of unusually bad weather. This chart from Justin Lahart shows the number of people, in thousands, who had a job but who weren’t paid during the survey week because of weather:

Former Labor Department deputy chief economist Jared Bernstein doesn’t think it had a big effect. In his analysis of this month’s BLS report he wrote, tThe BLS commissioner mentioned unusually cold weather as one factor possibly driving down construction, which lost 13,000 jobs after averaging +10,000 per month last year. But nothing else jumped out at me.”

The bigger problem is the number of people dropping out of the labor force. The Economic Policy Institute has a good series of interactive charts on those “missing workers” who should be either working or looking for a job, but aren’t. Here’s one on the age and gender of those workers:

Then, of course, there is Bill McBride’s updated chart of the current economic recovery compared to recoveries from previous recessions since World War II:

Finally, here’s the payrolls gap. At the current level of growth, it will take another 16 months to get back to the number of jobs the economy had before the 2008 recession.

6 comments

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We need to create well over one hundred and twenty thousand jobs a month just to keep up with people entering the work force. And people are tired of seeing well under that being created and meanwhile the unemployment rate goes down what joke.

Posted by RayM. | Report as abusive

ADP said it was 238,000 jobs in December. How does the government come up with a number of 74,000? ADP does payroll accounts so they should know.

Posted by nodeficit | Report as abusive

I like the optimistic idea. Nonetheless, there should be a bit more data analysis behind to serve long periods as for instance changes in skills, part time jobs, temporary work, working week, population growth, labor market clusters.

Posted by google_pass | Report as abusive

Ludicrous to blame it on the bad weather. January’s weather is bad, like frozen over. XMAS business should have hired more people but I guess not. Unemployment according to the government shadow statistic is 23 %, now that is believable. There are no jobs!

Posted by vippy | Report as abusive

Own it lemmings…

Posted by Crash866 | Report as abusive

You voted…twice…

Posted by Crash866 | Report as abusive