Economy

There are two reasons the jobs report was a big miss — one of them was a fluke, and one of them is an unstoppable trend

Key Points
  • Economist Diane Swonk attributes "wacky weather" to contributing to a reduction of overall nonfarm payrolls by 80,000 last month.
  • Department store closings, which led to a sharp decline in retail jobs, was another factor, Swonk says
  • "There is little reason to hire up when you are planning to close a store," Swonk adds.
Disappointing jobs report blamed on 'wacky weather'
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Disappointing jobs report blamed on 'wacky weather'

A combination of a terribly cold and snowy month as well as a crush of department store closings led to the disappointing growth in March jobs, economist Diane Swonk told CNBC on Friday.

Those factors were reasons Swonk believes the government's jobs numbers missed the mark so badly — registering just 98,000 new nonfarm payrolls last month, compared with estimates for 180,000.

The founder and chief executive of DS Economics said on "Squawk on the Street" that "wacky weather" may have contributed to the reduction of overall payrolls by 80,000 last month.

March was colder than normal and there was a big snow storm in the Northeast during the time when the government conducts its employer surveys in advance of compiling the monthly data. When it's tough to get to work, many employees stay home, which takes hourly workers off the payrolls for the week.

In a research note, Swonk wrote about how weather and retail industry factors caused a decline of about 30,000 retail jobs in March:

"This reflects a combination of lousy weather during the month ... and the ongoing move of consumers from shopping in stores to online. Major retailers, including JCPenney, Macy's, and Sears, have already announced a flurry of store closing and shift to online operations for this spring."

The retail industry also saw about a 31,000 job falloff in February, as pointed out by "Squawk on the Street" co-host Carl Quintanilla in a Friday tweet.

Two months in a row of 30 THOUSAND retail jobs lost. And no sign that will let up.

CNBC's Jim Cramer also got into the action.

"This is something called a 'secular trend', which means it's not gonna come back anytime soon." - @jimcramer on loss of retail #jobs

Earlier this week, a Credit Suisse report showed about 2,880 stores closures so far this year, more than double the same period in 2016.

With 60 percent of store closures typically announced in the first five months of the year, Credit Suisse estimated there could be more than 8,640 store closings by the end of the year.

"There is little reason to hire up when you are planning to close a store," Swonk said.