Courtesy of Mish.
Initial Reaction
Once again, the stats reveal much weakness.
- Big Miss: Nonfarm Payrolls rose by 74,000. The median forecast of 37 economists was 205,000 jobs according to USA Today.
- The civilian institutional population rose by 178,000 but the labor force declined by 347,000.
- Nonfarm payroll growth is the smallest number since January 2011.
Clearly, this is yet another bad report, with people dropping out of the labor force like mad.
Blaming the Weather
Amusingly, USA Today reports that “Paul Ashworth of Capital Economics says severe winter was the main culprit behind the disappointing job gains.“
Did economists not know it was cold outside when they gave USA today their estimates? I guess not.
December BLS Jobs Statistics at a Glance
- Nonfarm Payroll: +74,000 – Establishment Survey
- Employment: +143,000 – Household Survey
- Unemployment: -490,000 – Household Survey
- Involuntary Part-Time Work: +48,000 – Household Survey
- Voluntary Part-Time Work: -127,000 – Household Survey
- Baseline Unemployment Rate: -0.3 to 6.7% – Household Survey
- U-6 unemployment: +0.0 to 13.1% – Household Survey
- Civilian Non-institutional Population: +178,000
- Civilian Labor Force: -347,000 – Household Survey
- Not in Labor Force: +525,000 – Household Survey
- Participation Rate: -0.2 at 62.8 – Household Survey
Additional Notes About the Unemployment Rate
- The unemployment rate varies in accordance with the Household Survey, not the reported headline jobs number, and not in accordance with the weekly claims data.
- In the past year the population rose by 2,395,000.
- In the last year the labor force fell by 547,000.
- In the last year, those “not” in the labor force rose by 2,943,000
- Over the course of the last year, the number of people employed rose by a mere 1,374,000 (an average of 114,500 a month)
The population rose by over 2 million, but the labor force fell by over a half-million. That’s your declining unemployment rate in a nutshell….
