Posted on
April 6, 2012 by
russgrote
By Russ Grote, (202) 822-1205, rgrote@hamiltonps.com
Read our cheat sheet here.
The March payroll report gives us very little to celebrate. The economy added only 120,000 jobs in March, 80,000 below expectations. Surprisingly in the household survey, the overall number of jobs actually fell by 31,000. And while the unemployment rate dipped to 8.2 percent, this was only due to a drop in labor force participation. The March payroll report adds to the toppling evidence that the current recovery is fragile and will up the pressure on the Federal Reserve to take action.
One explanation for the disappointing swing in jobs may be a result of weather-related affects on the January and February numbers as we noted earlier this week. Seasonal adjustments may have inflated in prior months due to warm weather boosting job creation in seasonally sensitive sectors. The construction and retail industries, two sectors very sensitive to weather patterns, lost over 40,000 jobs collectively in March.
However, just as the previous two months may not have been as strong as we…
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Posted on
April 6, 2012 by
russgrote
Here is the HPS Jobs Fact Sheet for March 2012. Click to enlarge and right-click to save.
Read Russ Grote’s analysis of the jobs numbers, “And Let the Calls for QE3 Begin,” here.
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Posted on
April 1, 2012 by
asmith
By Matt McDonald, (202) 822-1205, mmcdonald@hamiltonps.com
A new economic discipline seems to have emerged over the past several months: econometeorology, the explanation of the economy through weather patterns.
Each month, jobs numbers are adjusted to account for seasonal variations. For example, there is typically a spurt of temporary hiring during the holiday season in retail, and there is typically a slowdown in construction over the winter months as snow and inclement weather prevent work. The seasonally adjusted number that we see every month helps smooth out those variations to make an apples-to-apples comparison of how the economy is doing. The effects of these seasonal adjustments can be seen in the chart below.
In the context of this seasonality, economists have been looking at this year’s warm winter. Goldman Sachs has estimated that the warm weather added between 50,000 and 70,000 jobs to the January number. If this proves to be the case, we would expect to see an overestimation of jobs growth in the winter, with a return to the “normal” slightly lower trend…
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