The U.S. economy added just 74,000 jobs in December, the lowest monthly figure from the Labor Department since January of 2011. Meanwhile, the unemployment rate dropped three tenths of a percentage point, to 6.7 percent. Expectations were high for the December jobs report, with many economists expecting to see about 200,000 new jobs and a steady unemployment rate of 7 percent. In November, the economy added 203,000 new jobs, beating expectations for that month.
The civilian labor force participation rate declined to 62.8 percent, down two tenths of a percentage point. That brings the U.S. labor force participation rate down to its lowest level since 1978. With December's jobs number added in, the average number of monthly jobs added for all of 2013 is 182,000.
The disappointing numbers are pretty much the opposite of what many expected to happen. As the Friday a.m. release of the jobs report approached, some watchers gave their predictions a last-minute, optimistic bump into the 230,000 range. That optimism is in part because some economists were hoping that 2014 will be the year of the economy's rapid expansion. We'll have to wait and see how December's terrible numbers plays into the narratives of those pushing that outlook.
Just before December's figures went live the Wall Street Journal provided more on the context leading in to December's numbers:
Since September, U.S. employers have added an average of 193,000 positions a month. The unemployment rate declined almost a full percentage point throughout 2013 — nearly twice the 0.5 percentage-point decline during 2012. The drop reflects good news and bad news. While some job-seekers found new positions, others gave up and left the work force. Those exits from the work force — along with the effects of an aging population — are seen in the labor-force participation rate, which, at 63.0, is three percentage points below its prerecession level.
In other words, even the strong numbers some economists were hoping to see wouldn't have necessarily translated into an improved environment for workers and job-seekers. And, to make things even worse, December's numbers probably don't take into account the 1.3 million Americans who just lost unemployment benefits in the last days of 2013. It's likely that many of those Americans will now give up the job search altogether.