Economy Now

Instant reaction and smart charts on economic trends.

These weather maps show why February hiring was weak

March 5, 2014: 10:32 AM ET

Cold weather can freeze the job market.

Snowstorms have become the excuse du jour for weak job growth this winter. After months of stronger job growth, hiring was weak in both December and January, and now economists are expecting more mediocre numbers for February.

Economists surveyed by CNNMoney expect only 150,000 jobs were added during the month. The Labor Department plans to release the official numbers on Friday.

It may seem odd that a few snow days can throw off an entire nation's economic statistics. After all, when the Bureau of Labor Statistics collects data on payrolls, workers are counted even if they were paid for just one day of work during the entire pay period. For those on a biweekly pay schedule, that means a worker would have to have been out of work for an entire two week period to not be counted in the national payroll figures. Even though this winter has been cold, it's unlikely that large numbers of Americans were out of work for entire two-week blocks.

But there are other reasons weather can have an impact on jobs. If offices close, flights are cancelled, businesses lose power or consumers stay indoors instead of shopping or eating out, those can all have an indirect impact on economic activity and hiring. Interviews might be canceled and new hiring may be postponed.

Then, most importantly, there are the jobs that entail working outdoors. These industries can experience wild swings in employment, depending on the weather. Take the construction industry. When temperatures are colder than normal, it's not unusual for construction projects to be put on hold until the ice and snow clear.

Take a look at average temps across the country during the week the BLS collects data for the jobs report.

average-temps

See how the January survey week was the warmest in the last three months? Construction firms had cut 22,000 jobs in December, which isn't surprising given the month was colder than usual. Then, they bounced back in January adding a whopping 48,000 jobs! (Recall that month, the entire economy added 113,000 jobs, so 48,000 is a pretty huge number for just one industry). That shouldn't be very surprising though. The map shows that nationwide, the survey week in January was far warmer than the survey week in December.

What will happen in February? Temps fell again, so don't be surprised to see a large decline in construction jobs in the next report.

"The January survey week was probably the warmest week in the entire winter. You actually saw the direct effects of weather benefiting construction in January," said Mark Zandi, chief economist for Moody's Analytics. "Then February was a mess, so I wouldn't be surprised if we got a negative number in the BLS data."

But winters are usually cold...

Yes, cold weather is typical this time of year, and it's not unusual for construction to slow during this season.

Economists will be quick to point out that the data are seasonally adjusted to account for historical trends. The statistics should account for typical seasonal slowdowns due to relatively normal winter weather. But when the weather isn't normal -- that's when it can have a big impact on the numbers.

In the maps below, we can see just how dramatically the weather diverted from its historical trends this year. December was far colder than the 1971-2001 "normal," whereas January was warmer than usual.

Then the trend reverted in February back to lower-than-normal temps. What does this tell us?

Get ready for a weaker-than-expected February jobs report, and keep an eye on those construction jobs.

weather-2014

Join the Conversation
About This Author
Annalyn Censky
Annalyn Kurtz
Writer, CNNMoney

Annalyn Kurtz is a senior writer at CNNMoney, where she covers America's jobs crisis, Federal Reserve policy and other economic news. Before joining the site in 2010, she served as a Rotary Ambassadorial Scholar in Prague and interned at Fortune Small Business magazine. @annalynkurtz

Powered by WordPress.com VIP.
Follow

Get every new post delivered to your Inbox.

Join 95 other followers