Usually, the weather is something that happens in relative isolation. Perhaps it disrupts travel plans or studies, or gets noticed enough to have a movie made about it, but it’s typically a topic left to meteorologists and climatologists. But with the job growth report for February just released, are the two more tied than people think?
How Weather Affects the Job Market
This past winter has been either an unusually harsh one or a return to normal wintery weather, depending on how you feel about the season. There was the Polar Vortex, which returned for a second round, as well as a major ice storm in the Great Lakes Region and northeastern United States. All the brutalities of winter caused flight delays and cancellations, worse-than-normal traffic jams, and power outages to homes and commercial buildings.
The summer is different, obviously, but the weather can affect the economy as well: heat waves mean increased use of air conditioners, which can strain the grid into brownouts and blackouts. But winter is the main story here, and will be for the next two weeks.
February Job Growth Report
Since the end of the recession in 2009, the battered economy has been trying to rebuild itself, but growth has been sluggish. Part of the reasons include the political stalemate last year, various crises around the world (with Russia-Ukraine being the latest one), and the extremes in temperature.
Given the past five years, it would be natural to expect that the economy’s recovery would continue in the same plodding manner: one slow, small step at a time, but showing signs it’d eventually reach its destination.
But last month’s job growth report had results not many people were expecting.
First, the Bad News
The unemployment rate rose one tenth of a percentage point to 6.7, making it a higher rate than the five-year low of 6.6 percent. The harsh weather also shortened the length of the average workweek which, while a little nice for employees to enjoy a little extra time off, led to decreased work effort and the shortest average workweek in just over three years. As well, economists who expected a higher increase in job growth woke up to find a bit of coal in their stockings.
But Now the Good News!
There are more positive signs than negative with the most recent job growth report:
The unemployment rate rose a smidgen because more people ventured into the job market, but weren’t able to find employment right away
Credit card debt is lower than expected, and hovering at a rate 14% lower than when the recession began
Another 175,000 jobs were added to payrolls--the result of 129,000 new positions the month before (although it’s lower than the last year’s first 11 months’ average of 205,000
That people are being hired instead of fired or forced to search for work means more money in the economy
The Federal Reserve is buoyed by the modestly good news, and is expected to cut their stimulus-giving bond purchases by the same $10 billion it did the last two times
”Good-paying jobs”, like engineers, architects and accountants, set a one-year record for the most number of jobs added with 79,000--this accounted for about 67 percent of all job growth in 2014, and a role reversal from 2013
There was a decrease of low-paying jobs, like retail (4,100) and warehousing firms (3,600)
Last month’s job growth news may have been slower and less than economists were hoping for or expecting, but the fact that it rose--and is continuing to rise--is good news. It may even be a better sign than extremely rapid growth, as steady growth allows for fewer mistakes.