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The unemployment rate declined from 7.0 to 6.7% in
December as people left the workforce, and nonfarm payroll employment edged up (+74,000).
Monthly job gains averaged 182,000 in 2013, about the same as in
2012. In December, employment rose in retail trade and wholesale
trade but fell in the information industry.
The share of Americans who are
either working or looking for work fell to 62.8%, near 35-year lows.
Incorporating the revisions for October and November, which
increased employment by 38,000 on net, monthly job gains have
averaged 172,000 over the past 3 months.
IHS Global Insight director of Financial Economics
said: "It is difficult to determine how much of this report is 'signal'
and how much is 'noise.' If the normal number of workers were unable to
work due to weather, the jobs count could have been closer to 200,000.
Yet this doesn’t fully explain the loss of 347,000 workers from the
Andrew Wilkinson, Interactive Brokers Chief
Market analyst said: "Before sounding the warning bells over
an economy falling off the cliff at year end, look at the chart of
retail employment. Some 55,000 of the net 74,000 came from retail – a
sign that retailers are finally accepting that they need bodies on the
shop floor and in warehouses and perhaps that they are warming to future
economics chief Jan Hatzius said: "The December employment report was broadly
weaker than expected, although some of the disappointment was likely due to bad
"[F]rom the household survey, the number of
individuals who reported not being at work due to bad weather was 273,000, above
the December average of 138,000, and consistent with a negative weather impact
in the report," he added. "This estimate, however, is very likely larger than
the true weather impact on payroll employment."
While the report was not good, Hatzius didn't
announce any revisions in its outlook for the economy or monetary policy.
"The information in today's employment situation
report does not change our expectation that the Fed will continue to taper its
asset purchases by $10bn at the January meeting," he said.
Retail trade added 55,000 jobs in December. Job gains
occurred in food and beverage stores (+12,000), clothing stores
(+12,000), general merchandise stores (+8,000), and motor
vehicle and parts dealers (+7,000). Retail trade employment
increased by an average of 32,000 per month in 2013.
Wholesale trade employment rose by 15,000 in December. Over
the past year, wholesale trade added an average of 8,000 jobs
Employment in professional and business services continued
to trend up in December (+19,000). This industry has added
637,000 jobs over the past 12 months. Within this industry,
temporary help services added 40,000 jobs in December. In
contrast, accounting and bookkeeping services lost 25,000 jobs
over the month.
Manufacturing employment continued to trend up in December
(+9,000). Manufacturing added 77,000 jobs in 2013, compared with
an increase of 154,000 jobs in 2012.
Employment in the information industry decreased by 12,000
in December, reflecting a decline in motion picture and sound
recording (-14,000). Employment in the motion picture industry
can be volatile from month to month. Over the year, employment
in information has shown little net change.
Construction employment edged down in December (-16,000).
However, in 2013, the industry added an average of 10,000 jobs
per month. Employment in non-residential specialty trade
contractors declined by 13,000 in December, possibly reflecting
unusually cold weather in parts of the country.
Health care employment changed little in December (-6,000).
Over the past year, job growth in this industry slowed to an
average of 17,000 per month, compared with an average monthly
gain of 27,000 in 2012.
In December, employment in most other major industries
Average hourly earnings of all employees on private nonfarm
payrolls edged up by 2 cents in December. Over the past 12
months, average hourly earnings have risen by 42 cents, or 1.8%. From November 2012 to November 2013, the Consumer Price
Index for All Urban Consumers (CPI-U) rose by 1.2%.
Turning now to the survey of households, the unemployment
rate decreased by 0.3 percentage point in December to 6.7%. Over the year, the unemployment rate declined by 1.2
percentage points, and the number of unemployed persons fell by
1.9 million. In December, there were 3.9 million unemployed
persons who had been jobless for 27 weeks or more, little
changed over the month but down by 894,000 over the past year.
The labour force participation rate declined to 62.8%
in December. Over the year, this rate declined by 0.8 percentage
point. The employment-population ratio, at 58.6%, was
unchanged in December and over the past 12 months. In fact, this
measure has held at or near this level since late 2009.
Among those neither working nor looking for work in
December, 2.4 million were classified as marginally attached to
the labour force, little changed from a year earlier. These
individuals wanted a job, were available for work, and had
looked for a job within the last 12 months. The number of
discouraged workers, a subset of the marginally attached who
believed that no jobs were available for them, was 917,000 in
December, down by 151,000 from a year earlier.
The seasonal adjustment factors for
the household survey are updated each year with the release of
the December data. Seasonally adjusted estimates going back 5
years (to January 2009) were subject to revision.
In summary, the unemployment rate declined from 7.0 to 6.7% in December, and nonfarm payroll employment edged up
Soft jobs report: Bad weather or bad economy?
Surprising jobs number adds confusion: Economist: FRI 10 JAN 14 | 10:04 AM ET - - Thomas Lee, JP Morgan chief US equity strategist, and Diane Swonk, Mesirow Financial chief economist & senior managing director, react to December's disappointing jobs report and discuss how the low number will impact the market. Swonk says the number is inconsistent and adds confusion.
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