Seeking Alpha
Bonds, long-term horizon, dividend investing, macro
Profile| Send Message|
( followers)  

The monthly employment report is certainly an attention-getting piece of news. It is widely followed and makes for great headlines. When combining this with the fact that confidence is the glue that holds our entire economic system together, I've come to expect a certain amount of mainstream-media cheerleading when the jobs report is good and excuses galore when an employment report is disappointing.

Today's employment number of 113,000 missed the consensus expectation of 181,000. Additionally, it was the second month in a row of a disappointing headline figure. Not surprisingly, I came across commentary from those who believe weather played a lead role in the unsatisfactory payroll number. Every winter, there seems to be several companies using bad weather as an excuse for poor business performance. It only seems natural that such an excuse would also extend to substandard economic reports.

For those who are in the camp that weather is to blame for January's less than adequate jobs report, I would like to offer the following food for thought:

1. There was a net gain of 48,000 jobs in construction in January. The gains occurred across residential and nonresidential building, nonresidential specialty trade contractors, and heavy and civil engineering construction.

2. While you may have come across the construction number in other commentary, here is one thing many readers may not have known about this month's report. The number of people not at work due to "bad weather" checked in at 276,000. And that is certainly not out of the ordinary for this time of year. In fact, from an historical point of view, one could argue the number is low. The Bureau of Labor Statistics provides monthly data going back to June 1976 for the number of people not at work due to bad weather. From that data, I created the following table. It shows the figures for each January, beginning in 1977.

Month/Year

Number People Missing Work Due to Bad Weather (thousands)

Jan-77

1250

Jan-78

982

Jan-79

917

Jan-80

464

Jan-81

201

Jan-82

1178

Jan-83

195

Jan-84

436

Jan-85

324

Jan-86

162

Jan-87

256

Jan-88

573

Jan-89

317

Jan-90

219

Jan-91

453

Jan-92

368

Jan-93

651

Jan-94

511

Jan-95

386

Jan-96

1933

Jan-97

587

Jan-98

413

Jan-99

476

Jan-00

167

Jan-01

305

Jan-02

234

Jan-03

289

Jan-04

289

Jan-05

342

Jan-06

233

Jan-07

386

Jan-08

325

Jan-09

325

Jan-10

300

Jan-11

916

Jan-12

227

Jan-13

256

Jan-14

276

If you scan that list, you will notice a whole bunch of January's during which the number of people missing work due to bad weather was a lot higher than this January. To find out exactly where January 2014 falls on the list, I sorted the numbers from highest to lowest. Notice how far down the list you have to go before bumping into January 2014 (it's 28th out of 38)

Month/Year

Number People Missing Work Due to Bad Weather (thousands)

Jan-96

1933

Jan-77

1250

Jan-82

1178

Jan-78

982

Jan-79

917

Jan-11

916

Jan-93

651

Jan-97

587

Jan-88

573

Jan-94

511

Jan-99

476

Jan-80

464

Jan-91

453

Jan-84

436

Jan-98

413

Jan-95

386

Jan-07

386

Jan-92

368

Jan-05

342

Jan-08

325

Jan-09

325

Jan-85

324

Jan-89

317

Jan-01

305

Jan-10

300

Jan-03

289

Jan-04

289

Jan-14

276

Jan-87

256

Jan-13

256

Jan-02

234

Jan-06

233

Jan-12

227

Jan-90

219

Jan-81

201

Jan-83

195

Jan-00

167

Jan-86

162

Furthermore, notice the spikes during the winter months in the following chart (shows monthly figures for the past decade).

(click to enlarge)Given all the nasty headlines about how awful the weather was in recent weeks, one might have expected much worse from the January 2014 missing-work-due-to-bad-weather number. If you want to use weather as your main excuse for the weak January employment number, you should first think about the aforementioned tidbits and then objectively consider this question: Might it be possible that there was actually (gasp) a slowdown in the labor market?

Source: One Thing You Didn't Know About The Latest Jobs Report