A Modified, Limited Good Jobs Report

It’s an election year, so every economic report is going to be filtered through the lens of political benefit. President Biden thus celebrated Friday’s Labor Department report that employers added a solid 216,000 jobs in December, but below the top line there are signs of a softening labor market. The question is whether government spending can sustain the job growth amid a weakening economy and business investment.

The unemployment rate last month held steady at 3.7%, but the labor force participation rate (62.5) and employment to population ratio (60.1) both fell by an unusually large 0.3 percentage points.