Call this one a big miss, but not a damaging hit to the overall job market. Yesterday, ADP predicted that the US economy added 250,000 jobs in December, their largest monthly jump in ten months. The BLS reported that the actual number of jobs added last month came in 100,000 jobs short of that mark, and well below the level of the two previous months:

Total nonfarm payroll employment increased by 148,000 in December, and the unemployment rate was unchanged at 4.1 percent, the U.S. Bureau of Labor Statistics reported today. Employment gains occurred in health care, construction, and manufacturing. …

In December, the unemployment rate was 4.1 percent for the third consecutive month. The number of unemployed persons, at 6.6 million, was essentially unchanged over the month. Over the year, the unemployment rate and the number of unemployed persons were down by 0.6 percentage point and 926,000, respectively.

Labor force engagement numbers remained at the status quo as well:

The labor force participation rate, at 62.7 percent, was unchanged over the month and over the year. The employment-population ratio was unchanged at 60.1 percent in December but was up by 0.3 percentage point over the year.

This is a significant drop from October and November, which added 211,000 and 252,000 jobs respectively, as the new revisions in today’s report shows. Those revisions combine for a net 9,000-job loss over previous reports but still puts the average growth in those months about 85,000 jobs higher than December’s report.

A few other points in the report look less than cheery for the holiday season, too. The Household data shows almost as many people added to the not-in-workforce status (96K) as newly employed (104K). All categories of part-time employment rose in December, but the biggest gainer was part time for slack work or business conditions (102K). In the Establishment data, retail trade was the biggest loser, dropping more than 20,000 jobs in a month where retail employment is traditionally strongest. Not surprisingly, wages didn’t exactly burst into wild growth either, increasing three-tenths of a percent from November and 2.5% over the previous December.

This report missed big against expectations, which had been set between 190-200K jobs added. CNBC’s Jeff Cox calls it “disappointing,” and notes that the U-6 measurement for unemployment edged upward:

Economists surveyed by Reuters had been expecting nonfarm payrolls to grow by 190,000. The total was well below the November pace of 252,000, which was revised up from the initially reported 228,000. …

An alternative measure of unemployment that counts discouraged workers and those working part-time for economic reasons edged higher to 8.1 percent. That came amid an unchanged labor force participation rate at 62.7 percent and a steady employment-to-population level of 60.1 percent, tied for the lowest since May.

The household survey, which calls homes to ask how many are at work, rose even less than the establishment survey, with 104,000 more Americans reported on the job.

AP econ analyst Christopher Rugaber wonders if there is a labor gap developing:

Most economists expect the Trump administration’s tax cuts to help speed the economy’s already decent pace of growth. Some envision the unemployment rate dropping as low as 3.5 percent by the end of 2018. A rate that low would mark the lowest such level in nearly a half-century, and it would likely force businesses to accelerate pay raises to attract and retain employees. Pay raises have remained puzzlingly sluggish for many U.S. workers despite the robust job market.

Some businesses, though, are already howling that they can’t find enough qualified people. There are roughly 6 million available jobs, near a record high, according to government data. Should unemployment fall to 3.5 percent, those complaints will intensify.

For at least two years, economists have been expecting the falling unemployment rate to boost wages. Though average hourly pay growth has picked up a bit, it remains about 1 percentage point below the 3.5 percent annual gain that typically occurs in a healthy economy.

Rugaber’s usually insightful, but this is a little tough to swallow. If the issue was a lack of qualified labor, then wages should be going up a lot faster than they are. Businesses don’t start raising wages based on the U-3 number, at least not directly; they raise wages to compete for qualified labor in scarce supply. The fact that wages aren’t going up very fast indicates that the issue isn’t the labor supply or qualifications. Either employers are finding both in needed quantities or the economy is not growing fast enough to require a lot of additional labor. That explains both the wage stagnation and the relatively low levels of job creation that we continue to see in the US economy, post-recovery.

The tax reform bill, especially the corporate side, is tailored to address these issues by incentivizing repatriation of funds and investment within the US. It will take some time to see those effects in job reports, but the White House and GOP had better hope it doesn’t take too long. Their survival in the midterm elections depends on it.