December marks disappointment for those optimistic about December’s non-farm payrolls report after ADP reported 238K jobs were added last month in yesterday’s report. Today, the market is stunned as only 74K jobs were added in December compared to last month’s 203K, revised upward to 241K, according to the Labor Department.
This marks the slowest pace since January 2011 as the general consensus was 197K hobs. Due to the ongoing decrease in the participation rate, the unemployment rate drops .3 percent to 6.7 percent, breaking the seven percent threshold and the lowest rate since October 2008.
Ameriprise Financial’s senior economist Russell Price agrees (with my idea of recent data) that “maybe we are getting a bit ahead of ourselves in the belief the economy’s momentum is stronger than it really is.” Economists got really excited over data from October to December, but the trend prior to this period was mixed. Price said that employment and the economy could be moving in the right direction but slower than originally thought.
According to the Labor Department’s household survey, many more individuals were leaving the workforce and dropped the participation rate to 62.8 percent, lowest point since 1978.