Tuesday, March 2, 2010

Hidden Cost of the Snowstorms: Jobs

The next round of unemployment data will appear soon, and indepedent experts (as well as White House officials) are predicting that the heavy snowstorms will distort the numbers. An article on MarketWatch.com provides very helpful analysis of the connection between the inclement weather and jobs data:
"The blizzard that blanketed the East Coast during the February employment survey week probably caused a sharp decline in payrolls for the month," wrote Peter D'Antonio, an economist for Citigroup Global Market, who was the MarketWatch forecaster of the month for January.

"The underlying fundamentals are improving gradually," D'Antonio said. "An excessive weather-driven decline will be reversed in March."
Economists predict that the storms could have an especially tremendous impact on the jobs data because they occurred during the reporting week:
The storms struck during the survey week. Each month, the government asks businesses how many workers were on the payroll for the pay period that contains the 12th of the month. They are asked about hours worked, and how much workers were paid.
Typically, however, the data rebound after bad weather:
In the past, major storms that hit during the survey week have had a major impact on employment, only to see a reversal the next month. Economist Joe LaVorgna of Deutsche Bank figures a snow storm in the survey week lowers payrolls by an average of 90,000 compared with the trend line.

In the storm that seems most comparable, the Blizzard of 1996, payrolls fell by 19,000 in January, and then rebounded by 434,000 in February. Average hours fell by 1.2%, the fourth largest decline on record. The three largest recorded declines in hours worked were also due to severe winter storms.
Conservative Bloggers Mock Linkage Between Snow and Jobs
Despite the fact that independent economic forecasters predict that the snow will impact the forthcoming jobs data, some conservative bloggers are mocking this idea. Responding to comments on this subject by White House Economic Adviser Larry Summers, some conservatives are expressing their disbelief.

So far, none of the conservative responses mentions the MarketWatch article -- which does not mention Summers. But I guess that makes sense, if you are trying to turn this into a partisan issue.

5 comments:

Malnurtured Snay said...

Darren --

I work at a Bookstore in downtown DC. The first night of that double-whammy blizzard, a Friday, the store closed early. It was closed all day Saturday. Two employees opened it for about three hours on Sunday. Open for six or seven hours Monday, closed Tuesday and Wednesday (although a couple of staff got in on Wednesday, they were unable to get enough people in to actually open and opted not to open at all and go home). We were open for six or seven hours Thursday, and I think also abbreviated hours Friday, and possibly even that Saturday.

So dismissing the idea that the snow had an impact on the economy is hogwash. Okay, no jobs were lost. That's still about fifty employees who had no or very little hours of work due to the weather and its effect on the transit system in DC.

Darren Lenard Hutchinson said...

MS: Thanks for the comment -- and the personal touch. According to the economists, a lot of people can relate to your experience. Part of the data measures the amount of work available - not just whether a job was lost or not. So, slashing hours will impact the data as well.

Malnurtured Snay said...

Fortunately, it's only a p/t job for me. Also fortunately I was able to get most of my hours by coming in on days when my office job was closed. Really hurts those full-timers and folks who live out on open-air Metro stations.

jobsjobs said...

I am so lucky that I work and live in a tropical place I don’t have to struggle working on a snow stormy weather. One of our main problems here at my place is the frequent blackouts because of the “el NiƱo “ and the source of our energy came from the water falls, it’s really very dry and hot out here. Most of the companies here have generators to back up when the power is out. Still I feel very lucky about it.
Retail jobs

Aot said...

Thanks for porting a very reliable source. The weather can be a stress in our jobs. Good luck to everyone.
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