Feb. Unemployment Report: Just ‘Decent’?

At first glance, the numbers in the February unemployment report are spectacular. An estimated 192,000 jobs were added last month to nonfarm payrolls, compared with 63,000 in January, 152,000 in December and 93,000 in November.

But look closer at the report and there are some big unanswered questions, the most important of which was articulated in a research note this morning from Capital Economics: “How much of last month’s gain was a reversal of the severe weather impact in January?”

If the big jump in February was simply a bounce-back effect after people returned to work when the January snow started melting, then the labor market recovery isn’t as strong as it might have been if the freak weather wasn’t a factor.

There’s evidence that weather conditions did play a role. If you break the new jobs down by sector, the biggest gains were in construction, which was up 33,000 after falling 22,000 in January.

A better way to analyze the numbers may be to average the past three months of gains, which amounts to 135,000 new jobs a month — just barely enough to account for population growth.



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