The economy added a paltry 74,000 jobs in December, a figure far below the gains of recent months that raised immediate questions about the strength of the economy — and whether the report was an exception to the trend.
The unemployment rate dropped from 7 percent in November to 6.7 percent, though that was in part from people leaving the workforce. The labor force participation rate dropped slightly to 62.8 percent, which is right around the 36-year low.
The economy had been averaging gains of more than 200,000 jobs per month, and the December totals are the lowest number of jobs the economy has added in a single month since January 2011.
The low figures surprised most observers, and Mark Zandi, chief economist with Moody’s Analytics, went so far as to say he wouldn’t pay any attention to the latest figures because they are not consistent with any other data.
“Next month we get benchmark revisions and I expect the December numbers to be revised up,” he said. “The reality is the economy is creating 200,000 jobs a month.
Zandi said the December decline in unemployment is also overstated and will likely be revised up, at least in part, in the next couple of months.
“Bottom line, I think the economy and job market have shifted into a higher gear and that will become evident in the next few months,” he said.