Weather or not
Welcome to the Counterparties email. The sign-up page is here, it’s just a matter of checking a box if you’re already registered on the Reuters website. Send suggestions, story tips and complaints to Counterparties.Reuters@gmail.com.
If you thought weather mattered before the data was released, you should now think that job growth was spectacular in February, right?
— Binyamin Appelbaum (@BCAppelbaum) March 7, 2014
Binyamin Appelbaum tweeted the above this morning after the BLS published its February jobs report. After all, before a dip this winter — just 84,000 jobs were created in December, and 129,000 in January — jobs growth had been a predictable 150,000-200,000 per month rate. Therefore, if you believe the weather depressed this month’s numbers, 175,000 is fantastic.
But then again, as Felix wrote back in January, “when the weather series starts going skewy, the signal-to-noise ratio in the jobs report, which is pretty low to begin with, tends to drop even further”.
The Washington Post’s Ylan Mui details how the BLS report is affected by the weather: it has a big effect on certain indicators, like hours worked, but it didn’t have a huge effect on this month’s job growth numbers because a person has to be out of work for an entire pay period to be considered not working due to weather. In February, there was a big storm on the East Coast around the time BLS did its survey, but it wasn’t big enough to keep most people away from work for more than a day or two. The weather could theoretically depress hiring, but it’s hard to tell.
On the bullish side is Stephen Gandel, who claims that if the weather had not affected the data, jobs growth would have been 468,000 jobs (additionally, he thinks jobs numbers should always be weather adjusted). Jonathan Wright also thinks jobs growth was better last month than BLS report says. He has his own ideas about how the current process for seasonal adjusting should be tweaked (his paper on why is here). By his calculation, jobs growth was actually about 211,000 last month.
Jared Bernstein, on the other hand, doesn’t buy the weather argument for the previous two months’ slowdown in job growth — which makes him think the bad December and January numbers are something to worry about. “Weather adjustments may have played a role in this downshift, but that is looking somewhat less the case as per incoming data (e.g., weather-sensitive construction was up 50,000 in January and 15,000 last month)”, he writes.
Matt O’Brien writes that we’re in a Groundhog Day recovery: growth is okay, but it’s not getting better. The weather caused the last couple of months to be worse than usual, he says, but this month shows it was just noise. “The economy is pretty much the same now as it’s been ever since the recovery began”. — Shane Ferro
On to today’s links:
“The facts as reported point toward Mr Nakamoto’s role in the founding of Bitcoin” – Newsweek
A great parsing Satoshi’s prose: the “Bitcoin founder’s writing matches nothing in Dorian Nakamoto’s background” – Karl Smith
The Satoshi paradox – Felix
Why Satoshi Nakamoto wanted to be anonymous – Timothy B Lee
Want to sign up for the Counterparties email? Click here.