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January 10, 2014

U.S. jobs report falls short of expectations

The U.S. economy added 74,000 jobs in December, far below market expectations of nearly 200,000.

In December 2012, employment rose by 219,000 jobs.

Meanwhile, last month’s job growth was accompanied by a 0.3 percentage-point dip in the unemployment rate, to 6.7 percent, its lowest since October 2008, due mostly to a shrinking work force. Over the year, the unemployment rate has fallen1.2 percentage points, the Bureau of Labor Statistics said.

“While there has been noticeable improvement in terms of the unemployment rate, other important elements of cyclical weakness in low labor force participation and still-high levels of long duration unemployment suggest a much less rosy picture,” Sterne Agee chief economist Lindsey Piegza said in a statement. “Those looking for improvement can certainly point to a further decline in the unemployment rate, just two-tenths above the Fed’s threshold of 6.5 percent, but still those looking to err on the side of caution can simply point to the tepid pace of job creation, averaging just 169,000 over the past six months, noticeably below the 180,000 pace at the start of 2013 and a further erosion in the participation rate.”

Job growth averaged 182,000 per month in 2013, the BLS said, about even with 2012. Retail jobs increased by 55,000 in December, while employment in wholesale trade grew by 15,000. Employment in professional and business services was up by 19,000 and manufacturing added 9,000 jobs.

Meanwhile health care lost 6,000 jobs in December, and information jobs dropped by 12,000, the latter of which the BLS said was due to a decline in the film and music recording industry The construction industry also shed 16,000 jobs in December.

The BLS also revised jobs numbers for November and said 241,000 jobs were actually added that month, up from an initial estimate of 203,000.

Read more

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