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US economy adds paltry 74,000 jobs in December- 11-Jan-2014
Washington: The US economy added just 74,000 jobs in December, but the overall unemployment rate continued to fall, hitting 6.7 per cent, the lowest since October 2008, the Labor Department said.
Both figures surprised analysts, and suggested the economy still faces headwinds after a year of steady jobs growth.
But some said both numbers were deceiving, and revisions over the next few months were likely to show a better picture.
The job creation figure, watched more closely as a sign of the health of the economy, was far less than the 197,000 analysts expected, and less than half of the monthly trend for the past year.
The unemployment rate meanwhile took its second 0.3 percentage point fall in two months, and was down from 7.9 per cent a year earlier.
The two key figures come from different surveys -- the job growth numbers from business and official establishments and the jobless rate from household data, explaining some of the discrepancy.
In the establishment data, private firms generated a net 87,000 jobs last month, largely in the retail trade and temporary jobs, with a drop in construction jobs paralleling bad weather in many parts of the country. Meanwhile government jobs at all levels fell a net 13,000.
The household survey determining the decline in the jobless rate showed a significant fall in the size of the labor force, by 347,000.
"The drop was almost entirely due to people leaving the labor force as the number of people reported employed in December only rose by 143,000, just enough to keep the employment-to-population ratio constant," said economist Dean Baker of the Center for Economic and Policy Research.
The same data showed a fall in the labor force participation rate, to 62.8 per cent, far below the 66 percent-plus levels seen before the 2008 financial crisis.
On the positive side, the establishment survey included an upward revision to November's job creation, by 38,000 jobs to 241,000.
At the same time, the numbers for average weekly wages and hours worked generally softened.
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