Daily Rundown   |  January 10, 2014

‘Disbelief’ over low job numbers

Mark Zandi explains why the December numbers will change and his projections for the 2014 economy.

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This content comes from Closed Captioning that was broadcast along with this program.

>> now that we have the jobs numbers from december, we can see how employment in 2013 stacked up. what had been a positive trend was derailed to 2.186 million net jobs were created. that's down from 2012 . across the year an average of 182,000 jobs were added every month, slightly down from 2012 and more than 2011 . looking more closely at the sector, business and professional services fared the best atting a half million jobs. the government sector lot of jobs. that has been a continuing trend ending with 9,000 fewer jobs than when it began. let's bring in the new economist to figure out what's going on. you have been on our sister station , cnbc talking about this. you believe they are a bit of an out liar and they will be revised. why?

>> i don't believe them. they were uniformly weak. the number was so low, it's not consistent with all the other economic data we are getting. gdp has been a lot stronger and that has been going more strongly and the surveys have been stronger and retailing has been good. it doesn't make sense. i don't want to pay attention to it at all.

>> the one thing i would wonder here is there was a prediction that the government shut down combined with the sequester would have a form of impact after the fact. the government was shut down for a couple of weeks in october and it takes a month or two to see the impact. is it possible we are seeing the impact.

>> the timing is all wrong. they have seen it in october or november or december. it's across the board. it's everything. construction, manufacturing and a decline in the number of courier job that u.p.s. and fedex to ship online.

>> that doesn't make sense in december.

>> right. i don't believe it. these numbers will get revised. every year we have a month where we get an out liar on the downside. it gets revised away or reversed in subsequent months. this is one of those months.

>> the famous zero jobs month.

>> august 2010 or something? now we created 175 thousand thousand jobs.

>> folks may not realize that the way the jobs survey and the unemployment rate , there two different surveys. the labor participation rate is a continuing trend. how troubled of you by this 36-year low in the labor participation rate ?

>> the decline is due in large part to baby boomers who necessary their late 50s and 60s.

>> when you say a large part, can you put a percentage on that.

>> participation rates since the recession rate hit five or six years ago. i am rounding so i don't know exactly. of that, 2 percentage points is due to this retirement. the baby boomers retiring. a percentage point and that's a lot of people, 1.5 million people. that's what i call cyclical. they are discouraged and should be in the workforce, but they don't feel like they will find a job that will compensate for child care and food cost and everything. that represents -- the reality is the unemployment rate , 6.7% misrepresents the state of the job market . should you add in another point, it's seven points. that's the health of the job market . by the way, that's bad. if you go back to every other recession since world war ii , the peak unemployment was 7%. 7.7 --

>> we are supposed to be on the down. 2014 , you were very bullish about the economy. this is the year that we might see acceleration in the recovery. do you still believe that?

>> absolutely. i'm convicted.

>> you said convicted?

>> i'm convicted, yeah. i feel strongly. i'm forecasting so all kinds of things that can go wrong and there is uncertainty, there always is. i feel strongly about the state of the economy. we are on much sounder ground. we righted the wrongs from the great recession. the only missing ingredient is confiden confidence. i think 2014 will be a good year.

>> we love to talk to you on these monthly job