In December, the official unemployment rate plunged to 6.7% despite the economy adding just 74,000 jobs. A healthy economy should be adding upwards of 200,000 jobs per month. December’s performance is clearly nowhere near that level. The jobs that were added mostly amount to the kind of jobs that Democrats deride as “McJobs” when it suits them.
The jobs that were added came largely from retail and wholesale trade which gained 55,000 and 15,000 jobs respectively. In retail, food stores and clothing stores added 12,000 each, general merchandisers added 8,000 and car dealers added 7,000. The holiday season hiring beat the retail 2013 average by 23,000. Business services, manufacturing and mining also added jobs.
What caused the unemployment rate to drop is the fact that hundreds of thousands of Americans gave up on seeking a job and left the labor force. Specifically, about 300,000 dropped out of the job market, taking the overall participation rate down to a level not seen since 1978. 91.8 million Americans are no longer participating in the workforce.
At the rate things are going, the Obama economy may achieve “full employment” by convincing enough Americans to quit looking for work.