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Thursday, March 6, 2014

ADP Numbers Disappoint. Was it the Weather?

Is the recent miserable weather affecting the labor market?

The private payroll processor ADP released its monthly private sector jobs report today, and it was considered disappointing.  Notice how many private sector jobs were added (according to ADP) each month in the last 7 months of 2013.. .and how many were added in January and now in February 2014:    

From ADP's February report

Are numbers, in jobs, in manufacturing, in housing starts, somewhat disappointing over the past two months, due to the miserable winter that we've been having.. all over the United States? Many people, including Janet Yellen, the new head of the Federal Reserve, and the generic bunch of "traders" and "pundits" apparently believe it may be so.  Or they are at least are willing to wait and see what happens over the next two months as the weather hopefully improves.

The "pundits" predicted 155,000 new private sector jobs and we only got (according to ADP estimates) 139,000.  And ADP revised their 175,000 January estimate down to 127,000, much more in line with the January BLS (Bureau of Labor Statistics) private jobs number, which was 142,000.

The big jobs indicator, of course, is the BLS jobs release which we will see tomorrow, Friday, March 7.  Economists and "pundits" are predicting 145,000 to 150,000 new jobs total, private and government.  Pundits' estimates have been high the last two months; let's see how things go this month.  BLS numbers are based on the surveys taken the week that includes the 12th day of the month, which, if I recall, was cold and snowy throughout most of the country.  Yes, the weather during that (usually) second week of the month CAN affect jobs numbers, even if the rest of the month was reasonable.  But, alas, in February, the whole month didn't seem that reasonable.  However, initial unemployment claims for February did not increase appreciably over those for January, so employers may have been waiting out the cold and the snow as well before making any moves to reduce work forces.  February is traditionally a hiring month, with a good half a million jobs actually "added back" in "real" numbers.  

So stay tuned for tomorrow's numbers.     


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