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Title: Blizzards Make It More Difficult to Decipher U.S. Economic Data
Source:
Bloomberg
URL Source: http://www.bloomberg.com/apps/news? ... 601109&sid=ayUbX0RiwrWA&pos=13
Published: Feb 17, 2010
Author: By Courtney Schlisserman
Post Date: 2010-02-17 11:46:18 by Brian S
Keywords: None
Views: 221
Comments: 2
Feb. 17 (Bloomberg) -- Blizzards that hammered the East Coast of the U.S. and winter storms that blasted through the deep South earlier this month also disrupted economic data. Record amounts of snow last week blanketed cities including Washington and Philadelphia, prompting the federal government to shut down for four days, businesses to close temporarily and Americans to stay at home. Another system caused record snowfall in Texas before moving into Mississippi and North Carolina. The blizzards that wreaked havoc for snow plows, clean-up crews and utility companies will soon play out in economic data, making it difficult to gauge the strength of the economy as it emerges from recession. Payrolls, hours worked, construction and retail sales are among figures that are likely to be distorted. “Almost certainly we will see bad-looking numbers for February and good-looking numbers for March and we probably won’t be able to tell what the underlying trend is,” said Bill Cheney, chief economist at John Hancock Financial Services in Boston. “Given we’re on the cusp of recovery, with jobs in particular, it really matters now.” The biggest disruption may be to the February employment report because the blizzards occurred during the week when the Labor Department surveys businesses and households. The figures are due March 5. Carl Riccadonna, a senior economist at Deutsche Bank Securities Inc. in New York, said that before the blizzards he was anticipating the February employment report to show an increase of around 85,000 jobs. Now, Riccadonna forecasts a loss of about 75,000. ‘Sharp Payback’ “Within a week or two, things start to bounce back, but typically what we see is in the subsequent month you get a particularly sharp payback,” Riccadonna said. “It temporarily clouds the crystal ball because now we have to discount a lot of the February data and wait until we get the March data which won’t be until April.” The economy has lost 8.4 million jobs since the recession started in December 2007, and companies need to add workers to sustain the recovery. The blizzards’ bigger impact on the report will most likely be in the number of hours worked, said Julie Maxfield, an economist at the Bureau of Labor Statistics, which compiles the jobs data. If an employee is paid during the survey period, regardless of hours worked, the worker will be counted as employed, she said. Hours worked dropped in two of the last three similar winter storms, falling to 34.2 in February 1994, from 34.4 the prior month, and 33.8 in January 1996 from 34.2, according to Labor Department data. Cusp of Hiring The number of hours worked is often used to determine whether companies are on the cusp of hiring. Typically, companies will increase worker hours before adding to their workforce. The average workweek rose to 33.9 hours in January. The winter storms may have also led to a plunge in first- time jobless claims last week that will likely reverse in following weeks as state labor offices reopen and the newly unemployed file applications, economists said. Retail sales figures may also have been skewed as Americans cut back on discretionary purchases, economists said. The 0.5 percent gain in January sales won’t be repeated this month because of snow in “many parts of the country” Maury Harris, chief economist at UBS Securities LLC in New York, said in a note to clients. In the months of five of the last six largest snowstorms, retail sales dropped between 0.4 percent and 1.4 percent, he said. Railroad Deliveries Railroads already have said they had to slow deliveries because of the weather. Norfolk Southern Corp., the North America’s largest rail carrier of metals and car products, declared force majeure across eight states after a blizzard hit Washington, Baltimore and Philadelphia and surrounding areas. The force majeure, a legal clause allowing producers to miss shipments, started at 6 a.m. on Feb. 6, and customers were told to expect delays of at least 48 hours. CSX Corp., the third-largest U.S. railroad, said its coal customers should expect loading delays and longer transit times due to the weather, which affected power supplies and caused trees to fall across tracks. The company commented in a statement on its Web site.
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#1. To: Brian S (#0)
For some of us, weather doesn't make any difference in 'decyphering' the economy. Permanent jobs are being shed. Temp jobs for shoveling snow are up, no doubt about it, but its mostly cash 'under the table', not reportable income. And hardly 'long term'.
my anti groupie can't get through life without me.
They are always being shed. They are also always being created. Anyone who knows anything knows that temp jobs sustained over time translates to real hiring. That's a fact no matter how you want to spin it.
The fact I was an RM2 escapes you obviously, and what that implies. Badeye posted on 2007-01-30 16:42:29 ET Reply Trace
#2. To: Badeye (#1)
Permanent jobs are being shed.
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