But investors aren’t wiping the 2014 sweat from their foreheads just yet. December’s jobs data delivered an unexpected drop in the unemployment rate but was dwarfed by the even less expected weak number of jobs gained in December.
Economists were expecting the economy would add 193,000 jobs in December, an expectation that fell wildly short when data showed that the economy only produced 74,000 jobs last month. The drastic contrast of a weak jobs growth versus a lowered unemployment rate sheds light on the often discredited method in which the government measures unemployment. A lowered unemployment rate, in this case, means a large number of the population that is out of work recently gave up trying to find work, thus dropping them from the calculations that create the unemployment rate. This paints a picture an economy continuing to struggle, as a troubled labor force is the core ingredient to a recession.
All of this news surrounding the jobs status of our economy points back to the continued uncertainty of the Federal Reserve and how it will find its way out of the stimulus program that has been supporting the stock market since 2008. The Federal Reserve has already announced that it intends to begin pulling back from the stimulus spending starting this month and continue pulling back throughout the year. The unseen consequences of this pullback, coupled with a troubled labor force, creates the kind of uncertainty that can really turn stomachs when the market is reaching peaks like those seen in 2000 and 2008.