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Job Growth Runs Cold In January
Originally published on Fri February 7, 2014 9:04 pm
MELISSA BLOCK, HOST:
From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.
AUDIE CORNISH, HOST:
And I'm Audie Cornish. And we'll begin the hour with the latest snapshot of the American economy. Once again, the news is mostly disappointing. Employers added a scant 113,000 jobs to payrolls last month. That's the second straight month where hiring fell far below expectations. On the other hand, the unemployment rate fell slightly and a good number of people who've been out of work for a long time found jobs.
Taken together, it's a bit of a head scratcher. And as NPR's Yuki Noguchi reports, the data have economists talking about the weather.
YUKI NOGUCHI, BYLINE: When December hiring proved very low, Jason Furman had a ready culprit. Snow. Furman chairs the White House Council of Economic Advisors. For January, he says, that's not the case.
JASON FURMAN: I don't think weather was a particularly important factor in the jobs numbers.
NOGUCHI: For one thing, the weather wasn't particularly bad the week the surveys took place. And, he says, much of the hiring that did take place was in sectors that depend on good weather, construction and manufacturing. Also, people didn't sit at home and hibernate. In fact, the labor force, the measure of the number of people working or looking for work, increased by half a million people.
Kevin Pfleger is a senior portfolio manager at Investors Security Trust. He thinks the weather could have been involved.
KEVIN PFLEGER: We did have additional weather problems in January, but, you know, we should have seen some amount of bounce-back.
NOGUCHI: But we didn't. Pfleger did manage to find a silver lining. He says for many months, the complaint has been that hiring has only been taking place at the lower end of the pay scale. But construction and manufacturing both pay better than average.
PFLEGER: The quality of jobs is what we would like to see and that is probably the most positive thing.
NOGUCHI: But Pfleger concedes most of the report reads negative. Last year, average monthly job gains were nearly 200,000, more than double the average in December and January.
PFLEGER: We're far short of that and it makes you start to think that there's some underlying economic weakness.
NOGUCHI: And then there are those like Mark Hamrick who believe bad weather was still a big factor in the January report. Hamrick is Washington bureau chief for Bankrate.com.
MARK HAMRICK: Severe winter weather has really been impacting two-thirds, three-quarters of the nation and that has been showing up in a lot of the economic data.
NOGUCHI: Namely, he says, auto sales are down, as are home sales, as consumers stay home.
HAMRICK: I think this is a situation where we really take a deep breath, hope that spring does arrive and hope that we have a better idea of what's actually happening, say, when we get into late March, early April.
NOGUCHI: Jack Kleinhenz is chief economist for the National Retail Federation. He says debates about the effects of the weather on the economy are not unusual this time of year.
JACK KLEINHENZ: January is one of the most difficult times to understand the seasonal forces.
NOGUCHI: In addition to holidays and weather, adjustments are made about how to account for temporary holiday jobs that go away.
KLEINHENZ: We've had some soft spots like this before early in the year for the last several years. So I think that we'll just have to wait for these numbers to thaw out a little bit more.
NOGUCHI: Thaw out, pun intended?
KLEINHENZ: Pun intended.
NOGUCHI: One thing all the market watchers interviewed for this story do seem to agree on, the Federal Reserve, which started scaling back on its bond-buying stimulus program, is likely to continue to stay the course, even if it has to wait until the spring to evaluate whether to blame the weather for what happened in the job market last month. Yuki Noguchi, NPR News, Washington. Transcript provided by NPR, Copyright NPR.