I admit it — I expected the jobs report for December to be in line with the mildly encouraging recent reports. I was wrong. John Steele Gordon has the story:
Job creation slowed markedly in December, with only a dismal 74,000 jobs created last month, the worst monthly report in three years. Economists, notorious for their clouded crystal balls, had been predicting 200,000 new jobs, above the 2013 average of 182,000 per month.
The unemployment rate did drop, and rather sharply, from 7.0 percent to 6.7 percent. But, in line with the now familiar pattern, this was due to people dropping out of the work force:
[The] labor participation rate fell to 62.8 percent, down two-tenths. As has been happening all through the so-called recovery, improvement in the unemployment rate has been largely the result of a shrinking labor force, not a growing jobs market. The labor participation rate is the now lowest since the days of Jimmy Carter.
Jimmy Carter labor force participaion numbers! That sounds like national malaise.
Gordon wonders how much longer President Obama can avoid major political damage from these numbers.
The “recovery” began in June 2009, according to economists. According to millions of unemployed, under-employed, and dropouts from the labor force, it has yet to begin.
The Democrats need good news in 2014 to offset all the bad news associated with Obamacare. I’m sure they hope that the job market will supply good news. It certainly didn’t last month.
UPDATE: Yuval Levin points out that the drop in the unemployment rate, though due in part to people leaving the labor force, has more to do with “the fact that the generally less reliable household survey, from which the jobs-created number is derived, showed more job creation than the generally more reliable establishment (or employer) survey.”