For the USA, unemployment is the new normal

Investors had a nasty surprise last week: US payrolls expanded by a mere 74,000 in December, the lowest monthly total in three years. However, this was due to the unusually cold weather.

The average payroll growth for the past two months is around 160,000; the six-month average is 170,000. So the overall trend hasn’t changed, and the US Federal Reserve is unlikely to halt its tapering programme.

But there certainly was bad news in the report, as Economist.com’s Free Exchange blog points out. The unemployment rate fell to a four-year low of 6.7%, down from [...]

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