Job numbers fall short of expectations

U.S. employers added a scant 74,000 jobs in December, the fewest in three years. The disappointing gain ends the 2013 economic year on a weak note and suggests that five years after the recession, finding work remains a tenuous prospect for many Americans.

While the Labor Department says the unemployment rate fell from 7 percent in November to 6.7 percent, the lowest level since October 2008, the drop occurred mostly because more Americans stopped looking for jobs. The government counts people as unemployed only if they are actively searching for work.

The percentage of Americans working or looking for work, known as the labor-force participation rate, fell to 62.8 percent, its lowest point since 1978. That low figure is generally seen as the result of not only ongoing economic difficulties but also changing demographics, including a higher percentage of Americans at retirement age.

The slowdown in hiring could cause the Federal Reserve to rethink its plans to slow its stimulus efforts. The Fed decided last month to cut back on its monthly bond purchases by $10 billion. It could delay further reductions until it sees evidence that December's weak numbers were temporary.

“Today’s numbers are ... a reminder of the work that remains, especially on one of our nation’s most immediate and pressing challenges: long-term unemployment,” said Jason Furman, chairman of the Council of Economic Advisers for the Obama administration.

He urged Congress to extend unemployment insurance, which expired at the end of 2013, in order to help “those who lost a job through no fault of their own and are still searching for work.”

December's hiring was far below the average gain of 214,000 jobs a month in the preceding four months. But monthly gains averaged 182,000 last year, nearly matching the previous two years.

Cold weather may have slowed hiring. Construction firms cut 16,000 jobs — the biggest drop in 20 months.

And many other industries posted weaker gains or cut jobs as well. Health care cut 6,000 positions — the first cut in 10 years. Transportation and warehousing cut a small number of jobs, suggesting shippers hired fewer workers for the holidays. Government cut 13,000.

One bright spot was manufacturing. Factories added 9,000 positions — the fifth straight gain. Still, that's down from 31,000 in November. 

Recent data have painted a picture of an economy on a steady rise. Exports hit a record level in November, lowering the U.S. trade deficit. Businesses have ordered more manufactured goods. Auto sales reached a six-year high in 2013.

But it was hard to find much to be optimistic about in the newest numbers.

Of the paltry number of jobs added, more than half (some 55,000) were in the retail sector. But even with gains in that sphere — especially the food service industry, which continues to regularly add jobs in the economy — recent reports suggest that mere employment in those industries is no guarantee of economic well-being.

For example, a recent analysis indicated that more than half of fast-food workers rely on public assistance, and the Bureau of Labor Statistics says that the average annual salary for a retail worker was just over $20,000 per year, below the federal poverty line of $23,492 for a family of four. 

The disappointing jobs numbers are part of a longer-term trend of wage stagnation in the country. According to the Social Security Administration (SSA), the strength of wages has declined in the last decade and a half, with the median wage in the U.S. at its lowest point since 1998. 

Al Jazeera and The Associated Press. With additional reporting by Tom Kutsch.