Cold weather can’t explain the lousy jobs report

February 7, 2014

(Nicholas Kamm/AFP/Getty Images)

Weather was the popular explanation for why the economy added a paltry 75,000 jobs in December when the average pace of hiring over the previous few months has been nearly twice that. And after the Labor Department reported lackluster jobs numbers for January this morning – 113,000 net positions – some prognosticators are sure to start invoking the polar vortex or the two inches of snow in Atlanta to explain it all away.

But January’s hiring data shows the cracks in that argument.

First, the construction industry added 48,000 jobs in January – offsetting job losses in December and the single biggest gain of any sector. The industry is one of the most sensitive to bad weather. If the cold were really the issue, this is where we would see it. Manufacturing also helps bolster the anti-weather argument, with the industry adding 21,000 jobs in January.

The weathermongers might point to the drop in retail jobs in January, but the month is typically a slow one for the sector anyway.

Second, the surveys that the January jobs report was based on were conducted AFTER the polar vortex and BEFORE snowmaggedon hit the South. The surveys are done during the week that includes the 12th day of the month. That polar vortex hit the country on Jan. 2 and was largely gone after a week. The snowstorm that shut down Atlanta occurred at the end of the month.

Third, as my former colleague Neil Irwin explained in this post last month, the big miss in the December jobs report was not in the construction industry, although that didn’t help. It was in sectors that simply weren’t hiring at the rate they had been. For example, health care, which had been an engine of job creation, actually shed 1,000 jobs in December after adding an average of 33,500 new jobs the previous two months. If anything, cold weather should increase the demand for health care workers because we’re all getting sick.

So if it’s not the weather, what is it? Why is the labor market still so weak?

There are no easy answers to that question. Without weather as a scapegoat, it raises the uncomfortable prospect that the economy’s potential for growth is lower than we would like it to be. That would mean there are fewer jobs to go around – sending a chill down the spin of the country’s 10 million unemployed workers.

Ylan Q. Mui is a financial reporter at The Washington Post covering the Federal Reserve and the economy.
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