Check out this story in the Saturday Washington Post.
Today’s post comments on the very weak monthly “jobs report” for the US economy issued by the Federal Bureau of Labor Statistics (BLS). The report said that businesses added 74,000 jobs last month in non-agricultural industries. That’s a very disappointing number. The economy has been adding about 200,000 jobs a month recently, and was expected to do a little better in December. Even that amount of gain is weak for a “recovery,” but it is enough to keep pace with growth in the working age population.
This story was not buried. If anything, it got more attention than deserved. In fact, all of the monthly job reports get more exposure than deserved. But that’s another issue; and perhaps the subject of another blog post.
The low job growth number for December was especially puzzling because most other key indicators, like consumer confidence and new claims for unemployment insurance, point to an economy which seems poised to move into higher gear. The report by BLS and virtually all newspaper and blogosphere stories said that cold weather in December probably contributed to the low job growth, but didn’t account for very much of the shortfall below the expected 200,000. Vague stuff. None of the reports I initially saw tried to estimate the impact of the snow and cold. So, it was not clear how much to worry about the report.
As I mentioned, the basic story about December job growth was not buried. What did get buried was help in understanding what the BLS report means. What would employment growth have been without the paralyzing freeze? Why is everyone saying the weather played a part, but not much in the sluggish growth? The only attempt at that which I could find was in the Business Insider, from a senior economist, Ted Weisman, at Morgan Stanley. http://www.businessinsider.com/wall-streets-take-on-december-jobs-report-2014-1
Weisman points out that a Census Bureau household survey conducted roughly over the same period that businesses reported the December job numbers to the BLS, showed that about 270,000 people reported not working in December 2013 because of bad weather. That a very large number — about twice as much as usual for the December period. So, one might conclude that the unusually bad weather caused a temporary drop of 135,000 jobs in December; or that the BLS report would have showed 210,000 jobs if not for snow storms and Antarctic temperatures. If, we’d be sailing, or sledding, right along.
But not so fast. For various reasons, too wonkish to detail here — in fact Weisman doesn’t go into detail either — he concludes from the household survey that bad weather shaved about 50,000 to 75,000 jobs from the December BLS report; so that job growth would have otherwise been about 140,000. That’s better than 74,000, though still disappointing.
I commend Mr. Weisman for taking the time to mine the data. I would have estimated the ad hoc, weather adjusted number a little above Weisman’s 140,000; at least so that I could sleep a little better till the data are revised. Like Weisman, I’m not immediately reporting how I get there, but if you want to know, we can follow up in the comment phase. Sleep tight! And don’t let the data bugs bite!