Economists: Bleak December report doesn't establish a slowdown

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Associated Press

Posted on January 10, 2014 at 2:01 PM

Updated Friday, Jan 10 at 4:03 PM

WASHINGTON (AP) — Economists are saying that the December jobs report doesn't convince them that the economy is weakening.

The government reported that the economy added just 74,000 jobs in December, after averaging 214,000 new jobs a month in the previous four months.

But economists say they can't draw any conclusions from one month's report. Dan Greenhaus of the brokerage firm BTIG says the numbers are "curious," since other indicators show the economy has been picking up steam recently.

At Bank of America Merrill Lynch, economist Michael Hanson says cold weather in December may have slowed hiring by about 75,000 jobs. He says even if those jobs were added in, it would still be a weak report -- perhaps "a warning sign that things maybe weren't as strong as we thought."

It's not clear whether the hiring slowdown might lead the Federal Reserve to reconsider its plan to slow its stimulus efforts. The Fed decided last month to start pulling back on its monthly bond purchases. But analyst Joel Naroff says he doesn't think the Fed "is going to be panicked by this."

He also thinks the 6.7 percent unemployment rate will eventually lead many employers to raise wages.

%@AP Links

172-a-12-(Labor Secretary Thomas Perez, in AP interview)-"241,000 last month"-Labor Secretary Thomas Perez says the report is a disappointment, especially when compared to the other reports in the fourth quarter of last year. (10 Jan 2014)

<<CUT *172 (01/10/14)££ 00:12 "241,000 last month"

173-a-12-(Labor Secretary Thomas Perez, in AP interview)-"labor force participation"-Labor Secretary Thomas Perez says it's not good that so many people dropped out of the work force. (10 Jan 2014)

<<CUT *173 (01/10/14)££ 00:12 "labor force participation"

162-a-10-(Jason Furman, chairman, White House Council of Economic Advisers, in AP interview)-"end of 2013"-White House Council Of Economic advisers Chairman Jason Furman says the big picture is still decidedly upbeat. (10 Jan 2014)

<<CUT *162 (01/10/14)££ 00:10 "end of 2013"

APPHOTO DCSA102: Rep. Kevin Brady, R-Texas, left, the Joint Economic Committee chairman, and Sen. Amy Klobuchar, D-Minn., the vice-chair, hold a hearing to examine the employment situation for December 2013, on Capitol Hill in Washington, Friday, Jan. 10, 2014. (AP Photo/J. Scott Applewhite) (10 Jan 2014)

<<APPHOTO DCSA102 (01/10/14)££

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