We were starting to see a lot of happy talk in the press about the economy turning the corner in 2014. Believe me, I hope the optimists are correct. But Friday's jobs report was a big bucket of cold water. Employment grew in December by 74k, well below the 180 to 200k that was expected. Employment now is still over 1m jobs below its peak level in January 2008. The unemployment rate dropped from 7 to 6.7% but only because more people dropped out of the labor force.
As I have said before, monthly jobs data are noisy and maybe the weather threw things for a loop. Looking at 2013 as a whole, WSJ reports that average monthly job growth of 182k was basically unchanged from 2012.
WSJ also has an interesting graphic showing how employment growth has varied by sector. The biggest job losses have been in manufacturing and construction. Retail and wholesale trade and financial services also have fewer jobs now than they did six years ago. One legitimate concern is whether these jobs are ever coming back.
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