Issue of the week: Why was hiring so slow in December?

A very disappointing jobs report for December douses a budding era of good feeling with “a great deal of uncertainty,” said Daniel Gross in TheDailyBeast.com. The new data from the Labor Department says that the economy added just 74,000 new jobs last month—the weakest figure in three years and a real blow for everyone who felt buoyed by the recent “surge of economic optimism.” I’m not too concerned about the December figure, especially since the Bureau of Labor Statistics has had a recent tendency “to revise the number upward.” But more of these weak figures could scare off investors, businesses, and consumers, making “life more difficult for incoming Federal Reserve Chairwoman Janet Yellen.” Everyone assumed that when she takes over the central bank on Feb. 1, she’d start reining in the economic stimulus of its bond-buying program. But “thanks to this contradictory, disappointing report, the Federal Reserve, like the jobs market itself, may be facing a bout of temporary paralysis.”

These government numbers should “be treated with caution,” said John Cassidy in NewYorker.com. They are starkly at odds with the latest figures from the private firm ADP, which claimed the economy added 280,000 jobs in December—much closer to economists’ predictions. If the BLS numbers are right, Mother Nature might be to blame. “Much of the drop-off in hiring was concentrated in construction and transportation, two industries where bad weather can disrupt things.” The real concern in last week’s job report is the unemployment figure, which fell to 6.7 percent. A lower unemployment rate sounds great—but not when it’s due to fewer people looking for work. And “unlike the low payroll figure, this is one falloff that has been going on for long enough that it can’t be dismissed.”

That’s all the more reason to extend unemployment benefits, said Joshua Green in Businessweek.com. Look what happened after North Carolina’s governor signed a bill last year to slash unemployment benefits: The state’s labor-force participation rate hit a 37-year low. Cutting jobless benefits forces the unemployed out of the job market altogether. That gives the illusion of reduced unemployment, but “it’s bad for everybody.” And it doesn’t save taxpayers money, since those former job seekers “wind up on disability, food stamps, or collecting Social Security earlier than they would like to.”

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There’s no mystery why the jobs numbers were so disappointing, said Derek Thompson in TheAtlantic.com. Older people are transitioning away from full-time jobs as they move toward retirement. At the same time, young people are working less—or waiting longer to start working—because they’re spending additional years in school. Federal policies are factors, “but the decline in participation is mostly a combination of demographics and scholastics. We’re entering the workforce later, staying longer, and getting older.” Policymakers can “spend/cut/deregulate” all they want, but “we’re up against mighty forces—age and education trends—that will resist quick fixes.”