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US Employment Growth Eases in December as Jobless Rate Falls to 5-Year Lows

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US Employment Growth Eases in December as Jobless Rate Falls to 5-Year Lows

Employment in December rose at the slowest pace since January 2011, a sign the US labour market lost momentum toward the end of the fourth quarter.

US payrolls increased by 74,000 last month, following a revised 241,000 gain in November, Labor Department figures showed today. The unemployment rate unexpectedly dropped 0.3 percentage points to 6.7 percent, the lowest since October 2008, as more workers exited the labour force. Economists forecasted a gain of nearly 200,000 payrolls in December, according to several estimates.

Bad weather was partly to blame for December’s soft reading, as 273,000 Americans failed to report to work due to unusually cold weather conditions. The ‘Polar Vortex’ that gripped the continental United States in January may have a similar effect on employment activity at the start of 2014.

The number of unemployed persons last month declined by 490,000 to 10.4 million, as more unsuccessful job-seekers exited the labour force. The labour force participation rate declined 0.2 percent to 62.8, the lowest since 1978.

Employment in healthcare and social assistance declined for the first time since July 2013. Payrolls also decreased for construction, transportation and housing, and government services. Employment rose in retail trade and wholesale trade, official figures showed.

The disparity between government data and the recent ADP report is striking. Unofficial but highly relied upon ADP figures earlier this week showed the US economy added 238,000 payrolls last month, presenting a much different picture of the US labour force at the end of 2013.

Payrolls were revised upwards by 38,000 in October and November. Total employment increased 2.19 million in 2013, little changed from the previous year. The jobless rate fell to an average of 7.4 percent last year, the lowest since 2008.

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