The Labor Department reported this morning that employers had only added 74,000 total new jobs in December, down significantly from the previous two months, which saw 200,000 and 241,000 jobs in October and November, respectively. The weak job-growth figure was the lowest since the beginning of 2011. The unemployment rate, however, plunged from 7% in November to 6.7% in December, bringing it to the lowest level since October 2008. Economists expected just under 200,000 jobs created. The December figure dipped well below the average jobs created per month in 2013 of 182,000.
The sector that gained the most jobs was retail, with 55,000 new jobs. Meanwhile, state, local, and the federal government lost 13,000 jobs, continuing a trend seen since the economic recovery began.
The unemployment rate, however, dipped down to its lowest level in more than five years thanks to a survey of households showing 143,000 newly employed people on net.
The reason for the divergence between weak job growth and a sharp drop in the unemployment rate is also a decline in what’s known as the labor force participation rate, the portion of the adult population that’s either employed or looking for work, to 62.8% from 63% in November. The portion of the entire population that’s employed, however, was at 58.6%, roughly the same has it has been for the last five years.