Friday, March 31, 2023
Homemarket insiderJobs report too ‘weird’ to just blame the weather

Jobs report too ‘weird’ to just blame the weather

A second month of surprisingly weak job growth and a lower unemployment rate is sending mixed and inconclusive messages about how much the economy is being impacted by weather or just slowing for some other reason.

January's new nonfarm payrolls totaled 113,000, yet the unemployment rate fell to 6.6 percent from 6.7 percent. The participation rate—the proportion of Americans who have a job or are looking for one—rose to 63 percent from 62.8 percent after falling in December.

Economists had expected 185,000 jobs and an unchanged unemployment rate of 6.7 percent, according to Thomson Reuters.

(Read more: The moststressful jobs for 2014)

A construction worker in New York during the Feb. 3, 2014, snowstorm.Matt Rourke | AP

Stock futures initially fell on the report, but recovered within minutes. Bond yields dipped but moved off their lows.

"This is not a definitive bull or bear report. This is very weird. Often you have numbers that are balanced. This one has real anomalies," said David Ader, chief Treasury strategist at CRT Capital. December's nonfarm payrolls were revised up by just 1,000 to 75,000, also a surprise.

"It's a bad report," added Daniel Greenhaus, chief global strategist at BTIG. "I'm not necessarily blaming the weather. Construction jobs gained." Construction showed a surprising gain of 48,000, a group unexpected to see gains in the winter weather.

The report also put market focus instantly on the Fed, which uses labor growth as a metric for monetary policy. The Fed has been reversing course on its easy money policy by slowly reducing purchases of Treasurys and mortgage securities.

(Read more: Weak jobs number alone won't sway Fed: Fisher)


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