Hiring Slowdown Blurs Growth View

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from The Wall Street Journal,

Dismal Jobs Report Raises Questions Over Economy’s Strength as Year Ended; Bad Weather a Factor?

American employers added a disappointing 74,000 jobs in December, a tally at odds with recent signs that the economy is gaining traction and moving beyond the supports put in place after the recession.

The jobless rate fell to 6.7% from 7% for the month, the Labor Department said, though the decline mostly reflects job seekers giving up their search and leaving the workforce.

The downbeat readings were partly attributed to distortions caused by bad weather, and many economists warned that the report may prove to be a fluke. Employers, too, are reporting a mixed take on the economy and their labor needs.

The report is likely to temper the Federal Reserve’s recent optimism about the health of the economy, but economists and analysts say it won’t alter the central bank’s course in reducing its bond-buying program. In December, Fed policy makers decided to cut the bond purchases by $10 billion, to $75 billion, starting this month. Fed officials said they expect to dial back the program steadily in 2014, as long as the economy looks strong enough to advance without such support.

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