Weather and the Jobs Report

Rah, rah, rah. That was the dominant feeling among Wall Street analysts after the jobs report exceeded expectations despite the dismal winter we’ve been having. Employers added 175,000 jobs even though the week referenced in the jobs survey, Feb. 9 through 15, was perfectly nasty.

For many analysts, that answered the question of whether the weather was masking deeper troubles. “If the economy managed to generate 175,000 new jobs in a month when the weather was so severe,” wrote Paul Dales, the senior United States economist at Capital Economics, “once the weather returns to seasonal norms payrolls employment growth is likely to accelerate further.”

Mr. Dales thought that snow and ice were clearly the culprits for the drop in retail employment. That segment lost 4,000 jobs in February and 23,000 in January, even after a seasonal adjustment for the end of the Christmas shopping spree.

Construction was more complicated. Last month, many economists pointed to an increase of 50,000 jobs in construction as proof that the weather was not a factor in the lackluster report. But David Crowe, the chief economist for the National Association of Home Builders, said employment was not heavily weather-dependent. To figure out if weather, and not just a loss of appetite on the part of homebuyers, is putting a damper on things, he compares housing starts, which require outdoor activity, to permits, which don’t. In January, he said, starts were down significantly, while permits had decreased only a small amount.

After that, he checks region by region. “In that starts figure, the West did not have much of a change,” Mr. Crowe said. “And that, of course, is the only region that hasn’t had abnormal weather that would stop construction. Starts in the West for single-family houses were actually up in January.”

But some economists, even those who predicted a strong jobs report, were unconvinced that weather could be blamed for the winter wobble. “Keep Telling Yourself It’s the Weather” was the title of a note from Steve Blitz, the chief economist at ITG, written before the jobs report came out. Mr. Blitz said that industries like insurance and technical services were forecasting little growth for the year, and pointed out that even Internet-based retail sales were down in January. Mr. Blitz predicted 180,000 new jobs in February, not far from the mark. He said that the weather would bring a rebound in the spring, but warned that after that, growth would subside.

Peter Schiff, the chief executive and chief global strategist of Euro Pacific Capital and a well-known commentator, called the weather a handy excuse for “desperate economists,” writing, “The weather has become such a handy and versatile tool for economic apologists that we may expect that financial news stations will start featuring meteorologists more heavily than financial analysts.”

“Move over Jim Cramer, hello Al Roker,” he wrote.

The weather clearly had an effect on individual workers, if not their actual jobs. More than 600,000 people could not get to work because of the bad weather, according to the Bureau of Labor Statistics household survey. That was almost twice the normal number for February. And while people got paid a little bit more per hour, their average number of hours fell, leaving their incomes flat.