February's Job Report Could Be Skewed By Record Snowfall
Each month there is a job report released by the government which reflects vital information about our nation's economy-how well the government is doing at creating jobs. February's report, set to be released today, is not expected to be positive, but rather bleak, and snowed with skewed data due to the record snowfall many parts of the East Coast experienced during the past months, says The White House.
A slippery snowy slope
As if it is not bad enough that the White House is pre-emptively pointing to bad weather to explain a poor jobs report, there is the possibility that the record snowfall inflated job losses by as much as 100,000. Private economist Sarah M. Place, President and CEO of Place Trade Financial said that "it is a slippery slope when you start blaming snow for the poor report and economic troubles of this country, especially since the snow effect can be filtered out."
Has the data been snowed?
Even with filtered data the report could confirm our worst fears: that we are suffering from weak hiring, minimal job growth, and an unemployment rate that is increasing, not decreasing. Together all of these factors could make the public skeptical in more ways than one. Skeptical about the precision of the figures in the February job report, and skeptical about the rating they would give the government for actually fixing the issue of job creation. "The White House and/or the Bureau of Labor Statistics (BLS) should offer a clear breakdown of the estimated numbers with an asterisk. Showing the actual numbers with the volatile data included as well as without will allow individuals to get a clearer picture of the state of the market rather than receive false hopes," said Place.
The snow has finally melted, but job growth is just as slow
This recession has eliminated 8.4 million jobs and the economy needs to add 100,000 jobs per month just to keep the jobless rate from increasing. If we want to lower the jobless rate in this country, we need to add as many as 300,000 job per month for at least 3 or more years in order to see a positive result.
According to surveys by Bloomberg News and Thomson Reuters, after losing only 20,000 jobs in January, February's numbers reached as high as 50,000, driving the unemployment rate back up, maybe as high as 9.8 percent. This comes in the wake of January when the jobless rate was at 10.0, but fell to 9.7 percent, according to a news release from the Bureau of Labor Statistics.
Jobless rate is still rising
Excluding the storms, the economy may have produced a net jobs gain in February, but that is still not enough to keep the jobless rate from rising. Households that are surveyed to help calculate the jobless rate are less affected by the snowstorms because workers who stayed home are still considered employed, doing nothing for the bottom line at businesses where net changes in jobs are tracked.
Beacon of hope and red flags in this blizzard
"If we remove the abstracts and events like snowstorms, we would have seen a small positive number for February on the payroll jobs report," says Robert Dye, Senior Economist at PNC. That would have been a nice beacon for the rest of the economy to look towards, but instead we have to wait at least another month. This is going to be a half speed recovery, said Dye during his interview on Fox Business.
Place says that she finds it concerning that the White House has made such efforts to preempt the report, because that raises a red flag over the actual state of the economy, which could lead some economists to hope that this is not a snow job meant to distract the public from the actual jobs report and its true implications on the economy.
Weathering the storm
Heavy losses in February may be a boon for the March numbers as individuals go back to work and hiring that was delayed in February has been fulfilled, says Place. Just look at what happened in previous years. Following the 1996 storm the economy was robust.
Regardless, the job's report attempts to offer a snapshot of the current state of the job market, which is a direct reflection of how our economy is performing, so bad news or good news, we will have no choice but to weather the storm.