US employers hired the fewest number of workers in almost three years during December, raising concerns about whether the job market can sustain its recent gains.
The Labor Department reported on Friday that nonfarm payrolls rose only 74,000 in December, the smallest increase since January 2011 and well short of the 200,000 jobs or so that most economists had expected. The surprisingly weak job growth figures has complicated things for the Federal Reserve, which last month announced plans to scale back its massive monetary stimulus program. The Labor Department said the unemployment rate fell from 7 percent in November to 6.7 percent, its lowest level since October 2008. But the drop occurred mostly because many Americans stopped looking for jobs. Once discouraged people without jobs stop looking for one, the government no longer counts them as unemployed. The labor force participation rate, or the proportion of working-age Americans who have a job or are looking for one, fell noticeably to 62.8 percent, close to 35-year lows. The US had bad weather in December, which may have further curtailed hiring plans. By some figures, the US economy has improved in recent months, but there are still millions of long-term unemployed and under-employed people, with many working in low-wage positions. According to a CNN/ORC poll released in December, nearly 70 percent of Americans feel pessimistic about the US economy and believe it is not improving. Reports show that poverty and inequality is still hurting millions of American families, fifty years after former president Lyndon Johnson declared “war on poverty” in America. Jason Furman, the head of the White House Council of Economic Advisers, defended the report on Friday. “Though December’s job growth was less than expected, we continue to focus on the longer-term trend in the economy: 2.2 million private-sector jobs added and a 1.2 percentage point decline in the unemployment rate over the course of 2013,” Furman said. House Speaker John Boehner, however, criticized the report. “Every American has a right to ask the question ‘Where are the jobs?’ Today’s disappointing report shows, once again, that the president’s policies are failing too many Americans, many of whom have simply stopped looking for work,” he said.