December employment situation report unemployment rate hiring
Ty Wright/Bloomberg via Getty Images
By Lucia Mutikani

WASHINGTON -- U.S. employers hired the fewest workers in almost three years in December, but the setback was likely to be temporary amid signs that cold weather might have had an impact.

Nonfarm payrolls rose only 74,000 last month, the smallest increase since January 2011, and the unemployment rate fell 0.3 percentage points to 6.7 percent, the Labor Department said Friday. The unemployment rate was the lowest since October 2008 and mostly reflected people leaving the labor force.

The step back in hiring is at odds with other employment indicators that have painted an upbeat picture of the job market. The data showed that 38,000 more jobs were added in November than previously reported.

"It looks like it's a weather issue -- a big drop in construction and a 1,000 drop in transportation.
People will focus on the unemployment rate drop and the upward revision to the prior month," said John Canally, an economist for LPL Financial in Boston.

Construction employment fell for the first time since May and leisure and hospitality payrolls rose marginally, suggesting that extremely cold weather in some parts of the country had held back hiring. In addition, transportation payrolls recorded their first decline in five months.

There was also a decline in the average workweek.

The smaller survey of households showed 273,000 people stayed at home because of the bad weather, the most since 1977.

Economists polled by Reuters had expected job gains of 196,000 jobs last month. But many pushed up their forecasts in the wake of upbeat labor market data during the week.

U.S. stock index futures trimmed gains on the report, while prices for U.S. Treasury debt rose.

A string of data -- from consumer spending and trade to industrial production -- has suggested the economy ended 2013 on strong footing and is positioned to gain even more strength this year.

More People Leave the Labor Force

The change in the economy's fortunes, which gave the Federal Reserve confidence last month to start dialing back its massive monetary stimulus, reflects waning fiscal uncertainty after lawmakers in Washington agreed on a two-year budget.

The labor force participation rate, or the proportion of working-age Americans who have a job or are looking for one fell 0.2 percentage point to 62.8 percent, the same as in October when the rate fell to its lowest since 1978.

That accounted for two thirds of the drop in the unemployment rate last month, but there was also an increase in household employment.

The U.S. central bank announced in December that it would trim its monthly purchases to $75 billion from $85 billion, and many economists expect it to decide on a similar-sized cut at its next meeting on Jan. 28-29.

Growth this year is expected to top 3 percent, a sharp acceleration from the 1.7 percent forecast for 2013.

Last month, the private sector accounted for all the gains in employment, with government payrolls falling 13,000 after rising 15,000 in November.

Manufacturing employment rose 9,000. While it was fifth straight month of gains, it was a slowdown from November's hefty 31,000 count. The number of construction jobs fell 16,000, snapping six consecutive months of gains.

Employment in the retail sector accelerated after slowing in November. There were also payroll gains in professional and business services.

Average hourly earnings rose two cents. The length of the workweek fell to 34.4 hours from 34.5 hours.



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wfreeberg

Could part of the problem be that we don't have qualified workers? We have a high school drop out rate of around 20%. How can our unskilled, uneducated workforce compete?

January 12 2014 at 7:25 PM Report abuse rate up rate down Reply
COMMON SENSE

Doed anyone really wonder why?2014= 20 new taxes, Obamacare, More business regulations. More big government and a country that has a debt of $17 TRILLION DOLLARS and the President refuses to reduce the Debt and is Spending more. Phoney job figures. More Lies, More Lies.
Obamacare --- To insure the uninsured we first make the insured uninsured and then make them pay more to be insured again so the original uninsured can be insured for free.
WAKE UP AMERICA!!!!!

January 10 2014 at 6:42 PM Report abuse +6 rate up rate down Reply
jdykbpl45

All due to Obama and his policies.

January 10 2014 at 5:18 PM Report abuse +3 rate up rate down Reply
unitedpaintings

I'm taking a cue from Senator Alfrankenfarce. I am going to layoff some deadbeat Democrats this afternoon.

January 10 2014 at 1:47 PM Report abuse +4 rate up rate down Reply
unitedpaintings

Obama, Reid and Pelosi so loved the poor, they created 10's of millions more.

January 10 2014 at 1:44 PM Report abuse +7 rate up rate down Reply
analyst0042

The new age of employment is upon us. Computers are replacing people and will increasingly do so...no medical costs and never wants a pay raise. In addition, its cheaper to hire a person in a third world country to do as much of my required work as possible. If for no other reason being than the cost of complying with Obamacare rules, this is becomingly a very good choice for many employers. Those who are waiting for that job at his previous income level is living their own personal version of Samuel Beckett's Waiting for Godot.

January 10 2014 at 11:43 AM Report abuse rate up rate down Reply
1 reply to analyst0042's comment
drpmindmender

Computers replacing humans in the workplace has been going on for than 50 years - Where have you been?

January 10 2014 at 5:42 PM Report abuse rate up rate down Reply
analyst0042

Those people out of work better give up the ghost and go for those fast food jobs. If you have been on unemployment for a yr or longer nobody wants what you have to offer at your requested income level. Cut your monetary demands drastically and/or switch careers. The rest become a hamburger flipper.

January 10 2014 at 11:34 AM Report abuse rate up rate down Reply
createidea

WASHINGTON -- U.S. employers hired the fewest workers in almost three years in December, but the setback was likely to be temporary amid signs that cold weather might have had an impact.

....and the unemployment rate fell 0.3 percentage points to 6.7 percent....

LOL !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

January 10 2014 at 10:04 AM Report abuse +5 rate up rate down Reply
1 reply to createidea's comment
analyst0042

Sure I have a need for good employee but its cold outside. Therefore I will assume this is the beginning of the great ice age therefore I will not hire this person and let those stupid competitors of mine to gobble up the best remaining candidates.

January 10 2014 at 11:36 AM Report abuse rate up rate down Reply
dearthaircroi

Actually I think the numbers for all the jobs created were bogus anyways. Also now that the holiday season over lets see how many seasonal jobs are cut . Macy's already reported they are cutting 2500 of their regular jobs.

January 10 2014 at 10:00 AM Report abuse +1 rate up rate down Reply