It’s the weather, they say. The loss of 36,000 jobs in last month’s nonfarm payroll count may have been a victim of the snow, the Labor Department advises with this morning’s release of the February employment report. The unemployment rate, at least, was unchanged last month, albeit at a high 9.7%.
What's the holdup on the recovery? "Severe winter weather in parts of the country may have affected payroll employment and hours," the government's press release advised. But lest anyone get the wrong idea, we're also told that, "it is not possible to quantify precisely the net impact of the winter storms on these measures."
The weather-is-to-blame view is persuasive for some economists. “Without the weather in February this would have been a month for jobs growth,” Ellen Zentner, a senior economist at Bank of Tokyo-Mitsubishi UFJ, told Bloomberg Television. “We’ve got positive jobs growth in there, we just can’t see it” because of the “weather effects,” she asserts.
Maybe we've been snow blinded, but The Economist's Free Exchange blogger this morning isn't quite so upbeat in reaction to today's employment report: "…a sideways movement in labor markets is a setback at this point. The economy must create over 100,000 jobs per month just to keep up with population growth, and it should be averaging monthly payroll increases of over 250,000 to reduce the unemployment rate at the same pace as in the first year of the 1983 recovery."
Upbeat or not, all of this leaves just one choice: Hoping for a spring thaw with the March numbers. Meanwhile, if we take the February report at face value, we're looking at a familiar trend in the employment picture: low-level losses and the tantalizing possibility that gains are near. But not yet. Damn those winter storms. (Click to enlarge)
Save for last November's 64,000 rise in nonfarm payrolls, 25 of the last 26 months have shed jobs. The red ink for nonfarm payrolls now stands at 8.4 million lost jobs, according to the Labor Department.
As for February, the losses were relatively light, compared with the carnage in the first half of 2009, but that's increasingly a thin reed for those trying to rationalize the numbers du jour as the moment of rebound slips ever forward.
At best, it was a mixed bag for last month's employment changes among the various subgroups that comprise the total nonfarm payroll number. Construction suffered the biggest hit, unsurprisingly, given the weather, losing 64,000 positions. The services sector almost but not quite picked up the slack, posting a 42,000 rise. But that masked the negative trend within the services sector last month, with one dubious exception. Indeed, the big winner among services firms in February came in temporary help services, which added nearly 48,000 jobs last month. Every bit of gain helps, of course, but that's not exactly the corner of the economy where expansion breeds bullish sentiment at this point.
Overall, there's a growing risk that the labor market will languish for an extended period. The big losses, perhaps any loss in nonfarm payrolls is behind us. But that's not good enough to begin the hard work of laying the foundation for even modest economic growth in the near term. More than two years after the Great Recession began, the labor market is still suffering, albeit suffering due to a lack of job creation. It's not obvious that this risk is factored into the crowd's sentiment, but another month or two of moving sideways in the labor market and there may be hell to pay.
Meantime, we'll be watching the weather forecasts. March has come in like a lamb and so the month may go out with a meteorological panthera leo.
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