Economists React: Optimism ‘Shot Down by Disappointing Data’

December’s weak jobs report elicited a mixed reaction from economists. Some blamed weather for the big slowdown in payroll growth, while others say they see evidence that the economy is once again decelerating.
Every stretch of economic optimism eventually gets shot down by disappointing data… December’s numbers are a very real reminder that acceleration in economic growth remains elusive. –Janney Capital Markets Managing Director Fixed Income Strategy Guy LeBas
The weather likely played a role in December’s weakness and, at 6.7%, the unemployment rate is closing in on the 6.5% threshold that was originally intended to signal that the Fed would at least begin to consider raising the fed funds rate. –Capital Economics Chief U.S. Economist Paul Ashworth
Labor market health showed some evidence of faltering momentum…And notwithstanding the improvement in the bottom-line unemployment number, indication on unemployment duration remained elevated —TD Securities Deputy Head of U.S. Research & Strategy Millan Mulraine
It is difficult to determine how much of this report is “signal” and how much is “noise.” If the normal number of workers were unable to work due to weather, the jobs count could have been closer to 200,000. Yet this doesn’t fully explain the loss of 347,000 workers from the laborforce. –IHS Global InsightDirector of Financial EconomicsPaul Edelstein
Before sounding the warning bells over an economy falling off the cliff at year end, look at the chart of retail employment. Some 55,000 of the net 74,000 came from retail – a sign that retailers are finally accepting that they need bodies on the shop floor and in warehouses and perhaps that they are warming to future prospects. –Interactive Brokers Chief Market Analyst Andrew Wilkinson
Ignore the wild payroll number, it won’t stop the Fed tapering again this month. –Pantheon Macroeconomics Chief Economist Ian Shepherdson
The drop in the jobless rate is again driven by a contraction in the labor force. These data are in kind with our below consensus macro forecast for 2014…This report should temper the growth bulls but not cow them.–Mizuho Securities USA Chief Economist Steven Ricchiuto
The report has silver linings for housing demand going into 2014. More young adults were working, and job growth in clobbered metros picked up. –Trulia Chief Economist Jed Kolko
Blacks disproportionately left the labor market, with the labor force participation rate for African Americans dropping by 0.3 percentage points to 60.2 percent, the lowest rate since December of 1977. The rate for African American men fell 0.7 percentage points to 65.6 percent, the lowest on record. –Center for Economic and Policy Research Co-Director Dean Baker