U. S. job market had weakest showing in three years at the end of 2013
WASHINGTON — The weakest month of hiring in three years ended 2013 on a sluggish note and raised questions about whether the U. S. job market can sustain its recent strong gains.
Employers added a scant 74,000 jobs in December after averaging 214,000 in the previous four months. Economists cautioned that cold weather likely played a role in the sharp slowdown. Many analysts said they would need to see more data before they could tell whether the job market had lost momentum.
The Labor Department said Friday that the unemployment rate fell from seven per cent in November to 6.7 per cent, its lowest level since October 2008. But the drop occurred mostly because many Americans stopped looking for jobs. Once people without jobs stop looking for one, the government no longer counts them as unemployed.
The proportion of people either working or looking for work fell to 62.8 per cent, matching a nearly 36- year low. Last month’s expiration of extended unemployment benefits for 1.3 million long- term unemployed could accelerate that trend if many of them stop looking for work. It’s unclear whether the sharp hiring slowdown might lead the Federal Reserve to rethink its plan to slow its stimulus efforts. The Fed decided last month to pare its monthly bond purchases, which have been designed to lower interest rates to spur borrowing and spending.
Despite December’s sharp slowdown, monthly job gains averaged 182,000 last year, nearly matching the average monthly gains for the previous two years.