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hide captionSign of the times? A "help wanted" sign in the window of a Philadelphia business last year.
Matt Rourke/AP
Sign of the times? A "help wanted" sign in the window of a Philadelphia business last year.
Matt Rourke/AP
There were only 74,000 jobs added to public and private payrolls in December, but the unemployment rate fell to a 5-year low 6.7 percent, the Bureau of Labor Statistics said Friday morning. It was a report that included several surprises for economists and raised questions about just how strong — or not — the labor market was as 2013 came to a close.
We'll have more on the news. Click your "refresh" button to be sure you're seeing our latest updates.
Update at 8:45 a.m. ET. If Job Growth Was So Slow, Why Did The Jobless Rate Go Down?
The 74,000-gain in payroll employment last month was far below the 195,000-or-so that economists expected. But the unemployment rate fell 0.3 percentage points, which also surprised the experts. They had thought the rate held steady at November's 7 percent.
Those figures often seem to contradict each other because they're based on different surveys. The job growth data come from surveys of businesses and government agencies. Those institutions are basically asked to report how many jobs they have on their payrolls. The unemployment figure, meanwhile, comes from a survey of households. People are basically asked if they were or were not working.
To understand what's going on, it's important to dig into the data behind the unemployment rate. According to BLS, there were 347,000 fewer people in the "civilian labor force" last month than there were in November. That group includes both those who have jobs and those who say they're looking for work.
Meanwhile, BLS says that 143,000 more people — a subset of the total labor force — reported they were working. When the total size of the labor force shrinks, but more people say they've got jobs, that brings the unemployment rate down.
A key issue: Why were there fewer people in the labor force? According to BLS, 917,000 individuals were classified as "discouraged workers" last month. That was up by 155,000 from November. Discouraged workers are those who would like to have jobs, but have given up looking for work because they don't think they can find any.
An increase in the number of discouraged workers is not a positive sign.
Our original post — Will Last Jobs Report For 2013 Offer Hopeful Signs For 2014? — previewed the news:
When the Bureau of Labor Statistics releases figures this morning about job growth and the unemployment rate in December, economists will sift through the data to see if the numbers add to the recent evidence of slow improvement in the labor market, NPR's Yuki Noguchi said on Morning Edition.
The BLS report is due at 8:30 a.m. ET. We'll be updating with highlights and reaction to the news. As we wrote Thursday, economists expect to hear that 195,000 or so jobs were added to public and private payrolls last month. The unemployment rate, meanwhile, likely stayed around November's 7 percent.
There's a growing sense among economists, Yuki said, that something of a "warm front" is sweeping across the economy and that job growth in 2014 might be able to continue at a 200,000-or-so monthly rate. If that happens, she added, the jobless rate could be down around 6 percent by year's end.
One caveat: As the Federal Reserve scales back on some of the stimulus it's been giving the economy, that could slow things down.
Our friends over at Planet Money, who track this sort of news all the time, offer this related post: Every Job In America, In 1 Graph.
