BLS Jobs Report: Economy Added Only 74,000 Jobs in December
Economists predicted an addition of more than 190,000 jobs for December 2013, which makes today’s Employment Situation Report unexpected bad news. Total non-farm employment increased by just 74,000 jobs in December, bringing the yearly average per month up to 182,000 per month — identical to 2012’s numbers. Unemployment, meanwhile, dropped to 6.7 percent, a new five-year low. So what’s going on?
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First and foremost, those unemployment numbers probably aren’t good news. Samantha Sharf at Forbes points out that the labor force participation rate shrank from 63 percent to 62.8 percent — its lowest rate in 30 years.
Every person who ceases to participate in the labor force isn’t giving up on finding work, of course — some are retiring or going back to school. Still, long-term unemployment is almost certainly a factor. In an interview with PBS, Senator Harry Reid put the number of long-term unemployed at 1.3 million — and that’s just the people who have been out of work so long that they’ve lost their unemployment benefits.
Some job declines can be pegged to the weather. The Labor Department noted that construction, for example, was down 16,000 jobs in December, “possibly reflecting unusually cold weather in parts of the country.” Employment in professional and business services trended up by 19,000 jobs, and manufacturing continued to improve (9,000 jobs) in December. Health care (-6,000) and information (-14,000) declined, while other sectors like finance, hospitality, transportation, and government remained flat.
All of this is in sharp contrast to the ADP report, which came out Wednesday and reported gains of 215,000 jobs.
“This is not the first time we have seen disconnects between ADP’s report and the Labor Department,” said Nick Raich, chief executive officer at the Earnings Scout, to CNBC.
The BLS revised its November numbers from 203,000 jobs to 241,000 jobs, and Moody’s Analytics, the company that collaborates to produce the ADP report, argues that it will do something similar for December.
“I wouldn’t pay any attention at all to these numbers. They’re not consistent with anything,” Moody’s Chief Economist Mark Zandi said on CNBC (via Politico). “We’re going to get the benchmark revisions, and they’re going to be all revised up and revised away.”
The PayScale Index shows a 0.2 percent growth in wages, year-over-year, in Q4 2013, and forecasts a growth of 0.7 percent in Q1 2014.
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