If Jobs Report Is Bad, Everyone Will Blame the Weather

If Friday's jobs report is especially weak, the government will probably blame the weather.

Economists are expecting that about 140,000 non farm payrolls were added in January, but they say the snow storms and bad weather that spanned the country last month makes that number even more unpredictable than usual. The Bureau of Labor Statistics should also note that in its report, they say.

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Recent monthly jobs reports have fallen short of most economists' forecasts, and this one could do the same, but with the excuse that weather played a role. Non farm payrolls for December were reported at 103,000, well below economists' forecasts of 150,000 or more.

"The weather is a big wild card," said Stephen Stanley, chief economist at Pierpont Securities. "It could depress the numbers by 20,000 or 30,000 , or it could have a much bigger impact."

Stanley expects to see 150,000 non farm payrolls when the government employment report is released at 8:30 a.m. Friday. He expects to see 175,000 private sector payrolls, which excludes the impact of public sector job losses.

"It's quite normal for us to have lousy weather in January but this is beyond that," said Citigroup economist Steve Wieting. "We are expecting a negative effect on payrolls from the weather." Wieting expects to see 120,000 non farm payrolls in total, and a 130,000 for private sector payrolls.

Economists say it's typical to have a high number of workers, like construction workers, that can't work because of weather in January. January has also always been the worst month of the year for weather effects on hiring, according to Deutsche Bank chief U.S. economist Joseph LaVorgna.

LaVorgna said he will be looking for the number in the survey that shows how many people who had jobs but didn't report to work because of the weather. That number averages 417,000 in January, but if it is much greater, then it will be clear that weather played a factor. That number is not seasonably adjusted, so it's not a direct comparison to the payrolls number, he said.

LaVorgna expects weather to result in 70,000 fewer jobs in January, and his total forecast is for an increase of 125,000 non farm payrolls.

LaVorgna said there was bad weather across the South, Mid-Atlantic and Northeast during the employment survey week. The last time that happened in a January was in 1996. The number of weather affected workers that month were 1.8 million. In that January, non farm payrolls came in at a surprising, negative 201,000 but the next month, the number jumped to growth of 705,000 payrolls.

"I think the market is going to ignore a weak number," said LaVorgna. "If we print a very weak number Friday and the weather worker series is higher..the ISM took away whatever rally (bonds) would get on a weak number on Friday. I think the ISM capped that number and limits the downside in equities." ISM manufacturing data for January came in at much stronger than expected 60.8.

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