Economic Commentary: Bad Weather & Employment

The Calm After The Storm?

Who would have thought that this winter would subject much of the country to massive storm after storm just at a time when everyone was getting so confident about the recovery. We barely get through the Holiday shopping season unscathed despite early storms and then January turned out to be a white out from the Deep South to the Northeast. No one knows at this point how badly these storms will hurt our economy in the first quarter. Certainly, the employment report for January was definitively skewed. Tough to get good numbers when people can’t get to the employment offices. We have had jobless claims going up and down from 25,000 to 50,000 per week. These numbers are normally volatile, but not that volatile. Think snow can’t affect national numbers?

As we mentioned last week, how can we have a report come in with 100,000 less jobs created, yet unemployment goes down sharply? It just does not add up. Just file the weather under another category in which predictions are so difficult. Everybody thinks rates are going up this year. However, if we have more shocks overseas and natural disasters, nothing is etched in stone. Not that we are predicting these events. However, our advice is to always be prepared for the unexpected. If the weather gets nicer (isn’t spring coming?) and the world quiets down, the economy could continue marching along with the recovery. Outside of the employment report, the vast majority of the economic releases have actually been positive in the past few weeks. We believe that is why the stock market has been strong and bond market weak despite the interruptions. Now if we could only get the real estate markets showing some spring-like strength.

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