Blame it on the weather, or on statistical "noise." But whatever it was, the Labor Department's report on the January job market showed hiring was lackluster, with 113,000 jobs added. That means fewer than 100,000 jobs were added, on average, during each of the past two months. The December reading also was a let-down.
Unusually bad winter weather has affected locations as widespread as Dallas, Atlanta, and Charleston, S.C., along with the usual-suspects cities in the Northeast and Mid-Atlantic. How much that has either distorted the data or temporarily affected the economy, we simply can't know for certain. At least not yet.
The news from January isn't all bad. The unemployment rate declined slightly to 6.6 percent, and more Americans were looking for work. We'd previously seen the jobless rate decline, but mostly because folks gave up their search. So, some improvement was seen there.
Also, the quality of jobs was a bit better this time. Construction and manufacturing accounted for a substantial number of the jobs added. Budget austerity also made its presence known, with about 30,000 government jobs lost last month.
Most economists believe that growth in the economy is proceeding at a moderate pace and that it should continue. In her blog, Diane Swonk, chief economist with Mesirow Financial, writes: "The underlying trend in employment growth is still decidedly positive, despite the slowdown we experienced in December and January." She adds, with a bit of tongue-in-cheek, that, "We are not likely to see a 'clean' report on employment, however, until and if the weather normalizes this spring."
Similarly, chief economist Scott Anderson with Bank of the West is mostly upbeat. "Bottom line, this was another somewhat disappointing payroll report that may have been impacted by the bad weather on the month," he says. Echoing a line also shared among many of his numbers-crunching colleagues, he adds, "We suspect the labor market recovery is healthier than the headline numbers imply."
Positives in the report
The unemployment rate declined by one-tenth of 1 percentage point in January to the lowest level since October 2008. Instead of giving up their job hunt, more Americans were looking for work, sending the so-called labor force participation rate up. Not exactly cocktail party fodder, but it's a metric watched closely by the Federal Reserve.
The fact that the stock market didn't careen sharply lower in reaction to the disappointing hiring number shows that the overall report was being taken with the proverbial grain of salt.
Janet's crystal ball
The Federal Reserve will get one more jobs report before its next policy-setting session in mid-March. New chair Janet Yellen testifies twice before members of Congress in the coming week. That will be her opportunity to put the jobs reports into context -- likely to say that the economy is continuing to heal. The Fed will require more information before it begins to believe there's true reason for new concern about the economy.
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