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Surprisingly weak jobs report puzzles economists

  • FILE - In this Wednesday, Oct. 23, 2013 file photo, Luis Mendez, 23, left, and Maurice Mike, 23, wait in line at a job fair held by the Miami Marlins, at Marlins Park in Miami. The labor Department issues the December jobs report, the last one for 2103, on January 10. 2014. (AP Photo/Lynne Sladky, FIle)

    FILE - In this Wednesday, Oct. 23, 2013 file photo, Luis Mendez, 23, left, and Maurice Mike, 23, wait in line at a job fair held by the Miami Marlins, at Marlins Park in Miami. The labor Department issues the December jobs report, the last one for 2103, on January 10. 2014. (AP Photo/Lynne Sladky, FIle)

  • A chart displays long term data on workers looking for jobs, during a meeting of the Joint Economic Committee to examine the employment situation for December 2013, on Capitol Hill in Washington, Friday, Jan. 10, 2014.  (AP Photo/J. Scott Applewhite)

    A chart displays long term data on workers looking for jobs, during a meeting of the Joint Economic Committee to examine the employment situation for December 2013, on Capitol Hill in Washington, Friday, Jan. 10, 2014. (AP Photo/J. Scott Applewhite)

  • Rep. Kevin Brady, R-Texas, left, the Joint Economic Committee chairman, and Sen. Amy Klobuchar, D-Minn., the vice-chair, hold a hearing to examine the employment situation for December 2013, on Capitol Hill in Washington, Friday, Jan. 10, 2014.  (AP Photo/J. Scott Applewhite)

    Rep. Kevin Brady, R-Texas, left, the Joint Economic Committee chairman, and Sen. Amy Klobuchar, D-Minn., the vice-chair, hold a hearing to examine the employment situation for December 2013, on Capitol Hill in Washington, Friday, Jan. 10, 2014. (AP Photo/J. Scott Applewhite)

  • FILE - In this , Friday, Dec. 6, 2013, file photo, White House press secretary Jay Carney gestures to a display about job numbers during the daily news briefing at the White House in Washington.  The construction industry stepped up hiring in 2013, filling many higher-paying jobs on the strength of a surge in home building. But much of the nation’s job growth last year was concentrated in lower-paying industries, like big retailers, bars and restaurants. At the same time, state and local governments added jobs for the first time in four years.  (AP Photo/Carolyn Kaster)

    FILE - In this , Friday, Dec. 6, 2013, file photo, White House press secretary Jay Carney gestures to a display about job numbers during the daily news briefing at the White House in Washington. The construction industry stepped up hiring in 2013, filling many higher-paying jobs on the strength of a surge in home building. But much of the nation’s job growth last year was concentrated in lower-paying industries, like big retailers, bars and restaurants. At the same time, state and local governments added jobs for the first time in four years. (AP Photo/Carolyn Kaster)

  • FILE - In this Wednesday, Oct. 23, 2013 file photo, Luis Mendez, 23, left, and Maurice Mike, 23, wait in line at a job fair held by the Miami Marlins, at Marlins Park in Miami. The labor Department issues the December jobs report, the last one for 2103, on January 10. 2014. (AP Photo/Lynne Sladky, FIle)
  • A chart displays long term data on workers looking for jobs, during a meeting of the Joint Economic Committee to examine the employment situation for December 2013, on Capitol Hill in Washington, Friday, Jan. 10, 2014.  (AP Photo/J. Scott Applewhite)
  • Rep. Kevin Brady, R-Texas, left, the Joint Economic Committee chairman, and Sen. Amy Klobuchar, D-Minn., the vice-chair, hold a hearing to examine the employment situation for December 2013, on Capitol Hill in Washington, Friday, Jan. 10, 2014.  (AP Photo/J. Scott Applewhite)
  • FILE - In this , Friday, Dec. 6, 2013, file photo, White House press secretary Jay Carney gestures to a display about job numbers during the daily news briefing at the White House in Washington.  The construction industry stepped up hiring in 2013, filling many higher-paying jobs on the strength of a surge in home building. But much of the nation’s job growth last year was concentrated in lower-paying industries, like big retailers, bars and restaurants. At the same time, state and local governments added jobs for the first time in four years.  (AP Photo/Carolyn Kaster)

It came as a shock: U.S. employers added just 74,000 jobs in December, far fewer than anyone expected. This from an economy that had been adding nearly three times as many for four straight months – a key reason the Federal Reserve decided last month to slow its economic stimulus.

So what happened in December? Economists struggled for explanations: Unusually cold weather. A statistical quirk. A temporary halt in steady job growth.

Blurring the picture, a wave of Americans stopped looking for work, meaning they were no longer counted as unemployed. Their exodus cut the unemployment rate from 7 to 6.7 percent – its lowest point in more than five years.

Yesterday’s weak report from the Labor Department was particularly surprising because it followed a flurry of data that had pointed to a robust economy: U.S. companies are selling record levels of goods overseas. Americans are spending more on big purchases like cars and appliances. Layoffs have dwindled. Consumer confidence is up and debt levels are down. Builders broke ground in November on the most new homes in five years.

“The disappointing jobs report flies in the face of most recent economic data, which are pointing to a pretty strong fourth quarter,” said Sal Guatieri, an economist at BMO Capital Markets.

It’s unclear whether the sharp hiring slowdown might lead the Federal Reserve to rethink its plan to slow its stimulus efforts. The Fed decided last month to pare its monthly bond purchases, which have been designed to lower interest rates to spur borrowing and spending.

Janet Yellen, who will take over as Fed chairman next month, “is probably scratching her head looking at the report,” said Sun Wong Sohn, an economics professor at the University of California’s Smith Business School.

Certainly many economists were. Some predicted that the job gain would be revised up in the coming months. The government adjusts each month’s jobs figure in the following two months as more companies respond to its survey.

Few analysts saw the sharp slowdown as the beginning of a much weaker trend.

“There is a good possibility this is just a one-shot deal that could either get revised away or made up for in next month’s release,” Scott Anderson, chief economist at Bank of the West, said in a note to clients.

Cold weather affected the report in several ways. Construction companies, which stop work during bad weather, cut 16,000 jobs, the most in 20 months. And the average workweek dipped as more people worked part time. An unusually large number of people missed work in December because of the weather, the government’s surveys found.

Michael Hanson, an economist at Bank of America Merrill Lynch, estimated that all told, the cold weather lowered hiring by about 75,000 jobs.

Several economists also highlighted statistical quirks in the report that they say are unlikely to be repeated. Mark Vitner of Wells Fargo noted that several industries reported unusually steep job losses. Accounting and bookkeeping services, for example, lost 24,700 jobs, the most in nearly 11 years.

And performing arts and spectator sports cut 11,600, the most in 2½ years. The movie industry shed 13,700 jobs.

“We should expect to see at least one fluky employment report each year,” Vitner said. “December’s . . . was likely that report.”

Perhaps as surprising as last month’s weak job growth was the flood of people – 347,000 – who stopped looking for jobs. The proportion of people either working or looking for work fell to 62.8 percent, matching a nearly 36-year low.

Welcome to the NObama and the democrats economy. Statistics show it IS the worst economic recovery. $1.3 Trillion Below Average Democrat accomplishments since 2008: 1. Lowest percentage participating in the workforce - ever! 2. More people on welfare - ever! 3. More people on food stamps - ever! 4. Slowest economic recovery - ever! 5. Highest number of uninsured Americans - ever! 6. Largest amount added to the nation's debt - ever!...... and their excuse of the day is? - when will America ever wake up and realize the democrats are a Despicable Disaster for the USA . NEWS FLASH.... devistating democrat Dodd Frank rules that will kill lending starts 1/14/14 .

sounds like an Onion headline...

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