The U.S. unemployment rate dipped to 6.7 percent in December, stirring considerable joy in Mudville. Before we spend time shouting hurrah, however, we should bear in mind a few other facts and recall that not so long ago an unemployment rate of 6.7 percent would have been considered scandalous.
One of the main reasons for containing our joy is that the rate fell from 7 percent in November despite the addition of just 74,000 net new jobs, a weak performance by any measure — and far below the 2013 monthly average of 182,000 new jobs. Another reason for caution is that the standard unemployment measure (U-3) provides a distorted picture of what’s taking place in the job market.
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