Monday, April 9, 2012

U.S. weather well above average in March. Jobs? Meh

I wanted to follow up with something I examined earlier, which looked at the incredibly warm winter and whether it was changing some economic stats. I certainly thought it had a minor effect on Wisconsin home sales and jobs through February, as seasonal layoffs were lessened and home sales were slightly up. However, February's warmth was nothing compared to March, which broke records in nearly half of the states in the U.S., and included new records for EVERY Midwestern state (marked by the bright red state and the "118").

Wisconsin was especially warm in March, even among all the states setting records. Look at this chart showing Green Bay's average temperature from Jan 1 to March 31. Needless to say, the Tundra wasn't exactly frozen before March 1, and then month number 3 blew everything away, even among the previous records.

So you'd think that might speed up Springtime hiring in jobs such as landscaping and construction and even retail food and beverage outlets (if they had an outdoor area- I guarantee you the Union Terrace a UW-Madison set a March record). However, you take a look at the March employment report that dropped on Friday, that didn't seem to be the case. The media concentrated on the lower-than-expected 120,000 jobs created for March, which by itself isn't that big of a deal, because the U.S. has still created 1.9 million jobs for the last 12 months and 2.1 million in the private sector, as steady growth continues. I'll worry that we're slowing down if I see those numbers stay down at the 120K levels each of the next 2-3 months, but it very well could be a one-off.

What I found interesting was when I went inside the numbers and looked at the different sectors of job performance for the month. I was expecting construction and related outdoor jobs to go up past the typical seasonal adjustement, but that didn't happen. The only exception seems to be places like the Home Depot. Meanwhile, restaurants and bars definitely hired up.

Change in jobs, U.S. February-March 2012
Construction -7,000 seasonally adusted, +86,000 non-seasonal
Food and beverage stores -6,100 seasonally adjusted, -8,500 non-seasonal
General merchandise stores -32,300 seasonally adjusted, -18,800 non-seasonal
Building material and garden supply stores +5,300 seasonally adjusted, +50,900 non-seasonal
Food services and drinking places +36,900 seasonally adjusted, +214,200 non-seasonal.

Where we might have seen a difference with the warm winter comes from the household report that determines the unemployment rate. In particular, a lot of entrants to the work force in February was offset by fewer-than-normal entrants in March, and a similar amount of non-seasonal job gains translated into many fewer seasonal job gains.

Work force numbers, February, March 2012
February- +679,000 non-seasonal, +476,000 seasonal
March - +202,000 non-seasonal, -164,000 seasonal
Two-month change- +881,000 non-seasonal, +312,000 seasonal

"Employed" status, February, March 2012
February- +740,000 non-seasonal, 428,000 seasonal
March- +728,000 non-seasonal, -31,000 seasonal
Two-month change- +1,468,000 non-seasonal, +397,000 seasonal

So when you look at it that way, it's possible that some of the activity that would usually have happened in March already happened in February, and that in reality the 2 months reflect what would normally be job growth in the 180,000 range each month instead of +240K in February and +120K in March.

We'll see in a couple of weeks how this plays out in Wisconsin, as last year's initial report of 9,100 seasonally-adjusted jobs was less than the non-seasonal increase of 13,200 (it was later revised down to 4,300 seasonal, by the way). This seasonal deflating of jobs is the opposite of the first two months, where lower-than-normal construction layoffs translated into a "gain" of jobs.

To review, looks like the weather boost from the record heat wasn't very much in the U.S. except for a few minor sectors, and it's not helping construction nationwide. What it may have done, however, is helped move some activity forward into February, as the dead of winter wasn't so dead, but the start of Spring in many parts had already sprung by March 1, so you didn't see a lot of help there. Wisconsin could prove the exception (we usually still deal with major snows in March, instead of seeing green grass and trees blooming like this year), but nationwide, the hiring bump didn't happen.

1 comment:

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