The press loves to hype the fickle monthly jobs report. The past few months have shown the wild swings of emotion it can elicit as the headline numbers show signs of strength, then weakness, then strength again.
This Friday, the Bureau of Labor Statistics reported that the economy added 175,000 jobs in February, besting economists' expectations of a roughly 150,000 payroll gain. Many had warned of downside risks, given February's bad weather — which hit during the period BLS conducts its employment surveys — and two weak labor-market reports released earlier in the week. At 8:30 a.m. Friday, it was as if Aunt Mildred, who had brought her famous ham casserole to the past few family gatherings, suddenly showed up with Ben & Jerry's. Time to celebrate?
Let's rewind a minute: Back at the end of 2013, economists were etching out their forecasts for this year and seeing rainbows (such as there can be in the postrecession era) on the horizon. Then, along came Old Man Winter, spoiling the party. Crummy jobs reports in December and January were blamed on severe weather, but they also raised questions about whether that underlying momentum everyone had predicted going into 2014 was really there.
It was — and is — tough to tell. Teasing the precise weather effects out of the report is a difficult task. Just ask BLS, which says so explicitly: "It is not possible to quantify the effect of extreme weather on estimates of over-the-month change in employment," the new report says. "What we need to do and will be doing in the weeks ahead is to try to get a firmer handle on exactly how much of that set of soft data can be explained by weather," Janet Yellen, the Federal Reserve chair, said at a recent hearing.
Now, some economists are pointing to Friday's report as evidence that the poor performance of the past few months was the result of the weather after all, and the economy is due for a payback. "If the economy managed to generate 175,000 new jobs in a month when the weather was so severe, once the weather returns to seasonal norms payrolls employment growth is likely to accelerate further," Paul Dales, senior U.S. economist at macroeconomic research firm Capital Economics, wrote to clients.
The volatile headline swings, as they change the narrative, mask the slow, steady pace of growth all along. Monthly employment gains averaged 174,000 in 2011, 186,000 in 2012, and 194,000 in 2013. The February numbers are "slightly higher than what forecasters were expecting, but for the American workforce, this is not good news at all — at this pace, it will take more than five years to get back to prerecession labor-market conditions," Heidi Shierholz, an economist at the liberal Economic Policy Institute, said in a statement.
They also mask the depressing underlying data points. A constellation of gloomy news lurked below the 175,000 gain: Teen unemployment climbed by 0.7 percentage points to 21.4 percent in February. Black unemployment, at 12 percent, remains well above the national rate of 6.7 percent. The ranks of the long-term unemployed — those out of a job for 27 weeks or more — swelled by 203,000 to 3.8 million, even as their numbers fell by 901,000 over the year.
Also noteworthy: The length of the average workweek edged down by 0.1 hour, maybe due to the bad weather. We'll have to wait until next month to test that hypothesis. But the overall story remains one of slow growth, one that the up! down! all around! headline numbers tends to hide.