Fair- and Foul- Weather Friends

As analysis of the March Jobs Report trickles out, one clear point of consensus seems to be that the very factors that make it misleadingly disappointing also make the boffo February report retroactively less impressive than it seemed at the time. Here’s Dean Baker of the Center for Economic and Policy Research:

The slower job growth shown in the establishment survey in March likely reflected the fact that good weather pulled forward a lot of hiring so that workers who might typically have been hired in March instead found jobs in January and February. This is most obviously the case in construction, which showed a loss of 7,000 jobs after showing an average gain of 13,000 in the prior three months. Weather may also explain the decline of 14,200 jobs in employment services (the broader temp category) after the sector added an average of 45,600 jobs the prior three months.

Ezra Klein also mentions the fair-weather hypothesis as persuasive, and goes on to say:

[I]f anyone is eager for encouraging signs, it’s worth pointing out that the very broadest measure of unemployment actually improved this month. This is the U-6 metric, which tallies up all unemployed persons, plus people marginally attached to the labor force, plus people employed part-time for economic reasons. Jim Pethokoukis likes to call this “perhaps the truest measure of the labor market’s health.” And U-6 dropped from 14.9 percent in February to 14.5 percent in March. Anyone trying to dig around for optimistic signs should start there.

Still, it’s a weak report all around. And we’ll know in a few months if March was actually as tepid as everyone thinks. In theory, the real significance of this report should be whether it convinces Ben Bernanke and the Federal Reserve that a little more monetary stimulus is needed.

But the Fed is what you might call a foul-weather friend of those believing the economy needs another push: barring really bad news, the glass is always half-full, and inflation’s always the top worry.

Ed Kilgore

Ed Kilgore, a Monthly contributing editor, is a columnist for the Daily Intelligencer, New York magazine’s politics blog, and the managing editor for the Democratic Strategist.