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Weather Expected To Effect February Jobs Report
Originally published on Fri March 7, 2014 9:39 am
DAVID GREENE, HOST:
The recent bout of winter weather that many of us have felt has hit the U.S. economy. Winter storms cooled job growth in February. The only question is by how much. Economists, investors and job seekers are looking to today's employment report from the government for an answer. NPR's John Ydstie says their predictions have been dampened by the weather too.
JOHN YDSTIE, BYLINE: John Sylvia is the top economist for Wells Fargo. His forecast for job growth in February has been pounded down by the weather.
JOHN SILVIA: We're thinking 135,000, which is a little bit below the consensus.
YDSTIE: Surveys of economists show an expectation of around 150,000 new jobs, but that's well below the average monthly job growth of around 200,000 for much of last year. Silvia predicts that retail employment was affected because shoppers didn't show up, that construction job growth slowed because snow covered job sites, and that hotels, bars and restaurants needed fewer workers because they had fewer customers.
SILVIA: When you're talking about restaurants, leisure, bars, I mean now you're talking about people voluntarily going out driving someplace and certainly the weather would have a negative impact there.
YDSTIE: Losses from empty hotel rooms and restaurant tables won't be regained, but Silvia says the economy will make up some ground and grow faster in the coming months.
SILVIA: It will have a slight negative impact on our overall economic growth, but we do think the second quarter pickup will reestablish a stronger trend.
YDSTIE: And Silvia predicts this year's growth will end up being stronger than last year's. So what about the unemployment rate? It's been steadily falling over the past year and now stands at 6.6 percent. Federal Reserve policy makers have said that a 6.5 percent rate is a threshold where they will begin considering moving short term interest rates higher. John Silvia thinks that rate will be hit today.
That could roil financial markets which are very sensitive to rising interest rates.
SILVIA: 6.5 percent is significant and we think that the markets will again be a little bit defensive.
YDSTIE: The Fed has tried to reassure investors that it's likely to keep rates low long after crossing the 6.5 percent threshold. John Ydstie, NPR News, Washington. Transcript provided by NPR, Copyright NPR.