The U.S. economy is adding jobs, which is a good sign, just not fast enough to produce anything better than modest growth.  Nonfarm payrolls added 103,000 workers in December, with 113,000 jobs added in the private sector. The figures offered a reminder that the monthly employment survey from ADP, which showed a gain of 297,000 jobs Wednesday, is not a reliable indicator for the government data. (See "Jobs Report Disappoints.")  After upward revisions to October and November's figures, nonfarm payrolls added 128,000 jobs per month in the fourth quarter, from 124,000 in the third quarter.  To Kurt Karl, chief U.S. economist at Swiss Re, the report offers no signal of strong growth. "It's steady as she goes for 2.5%-3% GDP growth," he says.  The swift fall in the unemployment rate, down to 9.4% from 9.8% in November, is nothing to write home about either. December's decline is largely a result of a shrinking labor force, Karl says, and a string of large increases in payrolls (say 200,000 or so monthly) could just as easily send the number higher as more discouraged workers resume looking for employment.  The direction of the labor market is good, "but the strength is disappointing," adds Karl. "All the signs [on the economy] are encouraging," he says, "it's a matter of gaining momentum."  Stocks wobbled after the Labor Department's report Friday, but shortly after the opening bell the Dow Jones industrial average was up 17 points to 11,714, the S&P 500 gained 2 points to 1,276 and the Nasdaq added 4 points to 2,714.  In corporate news, Best Buy ( BBY - news - people ) was 0.7% higher after affirming its 2011 earnings guidance. The electronics retailer is still down sharply from mid-December, when it reported third-quarter results and reduced its full-year forecast. (See "Ask Best Buy, It's All About The Outlook.")  Home builder KB Home ( KBH - news - people ) surged 6.4% at the open after reporting a surprise profit. Cost-cutting helped the builder deliver more to the bottom line and earn 23 cents per share, drastically better than the 17 cents consensus estimate.  Citigroup ( C - news - people ) was little changed Friday morning, up 0.2%. The Financial Times reported Thursday that the bank is shopping U.S. consumer finance business CitiFinancial, which could bring in as much as $1 billion.
Labor market moving slowly in right direction, but don't read too much into sharp drop in jobless rate.