Friday, January 10, 2014

December Employment Report: 74,000 Jobs, 6.7% Unemployment Rate

by Bill McBride on 1/10/2014 08:30:00 AM

From the BLS:

The unemployment rate declined from 7.0 percent to 6.7 percent in December, while total nonfarm payroll employment edged up (+74,000), the U.S. Bureau of Labor Statistics reported today.
...
The number of unemployed persons declined by 490,000 to 10.4 million in December, and the unemployment rate declined by 0.3 percentage point to 6.7 percent.
...
The change in total nonfarm payroll employment for October remained at +200,000, and the change for November was revised from +203,000 to +241,000. With these revisions, employment gains in October and November were 38,000 higher than previously reported.
The headline number was well below expectations of 200,000 payroll jobs added.

Percent Job Losses During RecessionsClick on graph for larger image.

This graph shows the job losses from the start of the employment recession, in percentage terms, compared to previous post WWII recessions. The dotted line is ex-Census hiring.

This shows the depth of the recent employment recession - worse than any other post-war recession - and the relatively slow recovery due to the lingering effects of the housing bust and financial crisis.

Employment is less than 1% below the pre-recession peak.

Payroll jobs added per month
NOTE: The second graph is ex-Census meaning the impact of the decennial Census temporary hires and layoffs is removed to show the underlying payroll changes.

The third shows the unemployment rate.

The unemployment rate decreased in December to 6.7% from 7.0% in November.

unemployment rate
The fourth graph shows the employment population ratio and the participation rate.

The Labor Force Participation Rate decreased in December to 62.8% from 63.0% in November. This is the percentage of the working age population in the labor force. 

Employment Pop Ratio, participation and unemployment ratesThe participation rate is well below the 66% to 67% rate that was normal over the last 20 years, although a significant portion of the recent decline is due to demographics.


The Employment-Population ratio was unchanged in December at 58.6% (black line).

I'll post the 25 to 54 age group employment-population ratio graph later.

This was a disappointing employment report.  However this is just one month and other recent employment data was positive.  As I noted yesterday, unemployment claims spiked higher during the BLS reference period in December (the reason I took the "under"), and that might have been weather related.   I'll have much more later ...

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