The Labor Department’s report on the Employment Situation for December is turning out to be a disaster, and the unemployment rate itself seems more than confusing. This report has all the hallmarks of a report that could see serious revisions. What stands out most is that the workforce participation rate is absolutely atrocious.

The ADP report set a tone for much higher job creations, but the nonfarm payrolls report in December came in at only 74,000. The consensus estimate from Bloomberg was higher at 200,000, and the whisper number had risen even higher than that. This was also worse than all estimates because the range of estimates was 120,000 to 225,000.

Private sector payrolls also grew only minimally, up to 87,000 in December. Bloomberg’s consensus estimate was 189,000, and the whisper was also higher there. The private sector payrolls missed all estimates as well because the range of estimates was 120,000 to 220,000.

Where this report gets very confusing is on the formal unemployment report. This dropped down to 6.7% in December from 7.0% previously. Bloomberg and Dow Jones were both looking for 7.0% to remain flat.

The numbers from October and November in payrolls were revised higher by a combined 38,000.

Where the decline in unemployment is so complicated is because of a poor labor force participation rate, down to 62.8%. This is now the lowest participation rate in over three decades.

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