The U.S. economy added only 103,000 jobs in December; economists had expected 175,000. The unemployment rate declined to 9.4% from 9.8% in November, but that was a result of fewer people in the workforce. Many have stopped looking for jobs. Over the past three months, the economy has added an average of 128,000 jobs. That is barely enough to keep up with population growth -- high school and college grads and immigrants entering the labor force. One possibly positive sign is that the birth/death adjustment model, a purely computerized estimate of jobs added or subtracted by hiring by supposedly new businesses, went down 357,000. That suggests the actual employment gain could have been even higher than reported. Usually, this model reports a significant gain, raising some eyebrows.

Generally, the December report suggests the economy is not recovering anywhere near as rapidly as some expect. Early in the day (Jan. 7), stocks are down very slightly. However, stocks have been rising of late on bad news, on expectation of more liquidity flowing from the Federal Reserve and federal pump-priming programs. For the market, bad news can be good news.