December 2013 employment gains too small?

The media across the board has reported disappointment that the BLS unemployment news release showed just 74,000 jobs were created in December 2013.  Should you panic?

Nah.

Hidden behind the story are five things:

1. The previous month's new jobs number was revised upwards from 203,000 to 241,000.  No one talked about that in the media.  If you average out Aug - Nov numbers, the average monthly gain is 213,500.  So don't be surprised when December's data is revised upwards dramatically.
2. ADP's report showed a gain of 238,000 jobs; combine that with the prior three months, and you get a four month average of 214,500 jobs created.  By now, you might see the point that the BLS data for December is likely a huge underestimation.
3. The official unemployment rate sank from 7.0% to 6.7%.  The media's narrative is that this was mostly due to a lower labor participation rate.  The total workforce includes all Americans over the age of 16, with no upper cap.  Each day, approximately 10,000 Americans reach retirement age, which means that as many as 310,000 Americans could have retired and taken social security.  BLS data indicated that in December, 71,000 (not seasonally adjusted) Americans age 65+ had in fact left the workforce.  So while there is a slightly lower labor participation rate, it's worth noting that a lot of Americans of qualified age for retirement still remain in the workforce, and distorts the nature of employment trends for prime-age workers (age 25 - 54).
4. The Central Bank announced a reduction in QE, following their December 18th meeting.  The Fed presidents are in frequent communication with employers within their regions, to maintain a pulse of how their region is doing, which is compiled in the Beige Book.  Here is the last one.  Had the Feds received feedback prior to its December 18th meeting that job growth was suddenly lethargic, they would not have pulled back QE, and instead waited.
5. Since January 2010, the difference between BLS' initial and final estimates has added up to 1.28M jobs.  That is to say, that if all you did was pay attention to the front number reported each month in the media, you would have been led to believe that the US economy had created 1.28M fewer jobs since January 2010, than what was actually created.  Again, let's see what happens in the next two months, as I fully expect this number to increase dramatically.

If you follow most economic projections, 2014 should be a big year in economic growth.  Don't get stuck on December's front data from the BLS.