Winter Still Slowing U.S. Job Growth
Winter weather is delaying a rebound in U.S. job creation. Our preliminary forecast calls for a 100,000 rise in nonfarm payrolls in February, below the 154,000 averaged over the prior three months and the 184,000 averaged over the second half of 2013. Weather has caused most, but not all, of the slowdown in job growth.
Quantifying weather's impact on economic activity is difficult. Based on the Climate Prediction Center’s forecast, the current week is 22% colder than the average second week of February over the past five years. Storms are also disrupting business activity, affecting the BLS' monthly employment survey being conducted this week.
Monthly reported employment has historically fallen below its previous trend whenever winter storms hit during the payroll survey week. This will limit any rebound from the disappointing job gains recorded in December and January. A conservative estimate puts weather's toll on nonfarm employment growth this month somewhere between 50,000 to 75,000 net new jobs.
Incoming employment data on the job market has been mixed. Initial claims for unemployment insurance unexpectedly rose in the week ended February 8. Meanwhile, continuing claims fell 18,000 in the week ended February 1, a sign that hiring improved. Continuing claims over the next couple of weeks will help gauge weather’s impact on hiring this month.
Ryan Sweet is a Senior Economist at Moody's Analytics.
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