You know when you have a cold, and you're pretty sick for a while, and then one day, you wake up and your throat feels slightly better? So you ease off the Dayquil and zinc lozenges and go back to work, and immediately get sick again?
Today's jobs report — which showed only 74,000 new jobs created in December, and an unemployment rate that dropped from 7 percent to 6.7 percent — is the economic version of that phenomenon. The numbers are almost certainly going to be revised next month. But the initial signal is that we've been too hasty in calling this a healthy economy. The labor force participation rate fell by .8 percent, meaning that more people stopped looking for work altogether. And several key industries — construction and health care among them — lost jobs for the first time in months.
The bad data out today means that the Fed's taper — its decision last month to scale back its stimulus efforts in the face of a recovering economy — was probably premature. And it means that Fed chair Janet Yellen will have to be exceedingly clear about which measure of economic health — unemployment rate (which is moving in the right direction) or participation rate (which is not) — will dictate the speed and size of future pullbacks. But mostly, today's report is a sign that we're still dealing with a fragile economy, made more fragile on the policy side by threats of extending sequestration and letting unemployment insurance lapse.
In other words, people without jobs need more help than we're giving them.