Weak employment numbers for December; weather might have played a role

From the Bureau of Labor Statistics:

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. Employment rose in retail trade and wholesale trade but was down in information.

Household Survey Data

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. Over the year, the number of unemployed persons and the unemployment rate were down by 1.9 million and 1.2 percentage points, respectively. […]

Establishment Survey Data

Total nonfarm payroll employment edged up in December (+74,000). In 2013, job growth averaged 182,000 per month, about the same as in 2012 (+183,000 per month). In December, job gains occurred in retail trade and wholesale trade, while employment declined in information.

This is woefully below the 200,000 gain in jobs that many predicted.

There are lots of reasons to be cautious about reading too much into one particular month of employment data, especially if that month is December, when seasonal workers are being hired, when there is a sizable seasonal adjustment to the numbers, and when weather is unpredictable. As Calculated Risk as regularly noted, unemployment claims spiked during a period of bad weather in December — and that coincided with the reference week for some of the data.

From Calculated Risk:

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.

It’s also that new hiring might have been stifled by fears of what might happen as the ACA is fully implemented, but those worst-case scenarios have not come to be.

U-6 unemployment (“Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force”) is at 13.1 percent. That’s the same as in November but down from 14.4 percent in December 2012.

The labor force participation rate declined by .2 percent in December, and over 140,000 additional people said that they were employed, according to the household survey (it’s not unusual to see that large of a divergence between the two surveys). Those factors contributed to the relatively sharp decline in the unemployment rate.

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