December Employment: Half Total Job Growth Needed To Absorb Last Month’s Immigration

Months of accelerating employment growth, lower unemployment claims and, more recently, indications that GDP is growing at a rate not seen since before the Great Recession, had convinced most economists that the worm had decisively turned. Many expected December’s job creation figure to be the largest since the Fall of 2008.

But in fact a mere 74,000 jobs were created in December—the smallest gain in three years. Snow and an unusually short Christmas retail season undoubtedly distorted the results. But long-term trends were not exactly encouraging.

For example: the labor force participation rate (LPR). It fell to 62.6% in December 2013, the lowest level in 35 years. This means that only 62.6 of every 100 working-age adults was actually working or looking for work in December.

A year ago, in December 2012, 63.4 of every 100 adults was in the labor force.

The U.S. labor force shrank by a whopping 496,000 in the past 12 months. Retirement of aging Baby Boomers is often cited as a reason for the decline, but LPRs for people under 55 also dropped sharply over the last year. For them it’s a matter of discouragement caused by a still weak labor market.

For whatever reasons, native-born Americans bore the entire brunt of last year’s labor force decline.

From December 2012 to December 2013:

• The total labor force declined by 496,000, or by 0.32%
• The native-born American labor force fell by 677,000, or by 0.52%
• Foreign-born labor force rose by 181,000, or by 0.72%

But this blip does not alter what looks to be the chief legacy of Barack Obama: the displacement of native-born American workers by immigrants...