Economists never know what the weather “was” until economic reports come out!
The March employment report may not prove as impressive as February or January but it still looks to be very strong, based on ADP’s 263,000 estimate for private payrolls. Details in the ADP report include a strong 49,000 gain for construction and a 30,000 increase for manufacturing. Professional & business services are another strong positive, up 57,000. This report will ease concern that heavy weather in the mid-month sample week for March may skew Friday’s report lower.
ADP’s employment estimate not only predicted strength in both February and January payrolls but accurately predicted outlier strength.
Today’s Job Report
The change in total nonfarm payroll employment for January was revised down from +238,000 to +216,000, and the change for February was revised down from +235,000 to +219,000. With these revisions, employment gains in January and February combined were 38,000 less than previously reported. Over the past 3 months, job gains have averaged 178,000 per month.
ADP no longer looks so glowing.
Today Econoday had this to say:
“Throw ADP out, it was the weather in March! Or at least the Category 3 storm that swept the Northeast may explain a much weaker-than-expected 98,000 increase in March nonfarm payrolls. This compares with Econoday’s consensus for 175,000 and a low estimate of 125,000” says Econoday.
“The big storm hit during the sample week of the employment report and apparently delayed new hiring, or at least that will be the takeaway from the report,” added Econoday.
Economists vs Weather
Time and time again, economists never know what the weather “was” until economic reports come out!
Mike “Mish” Shedlock