Warm Winter Economic Boost Coming Back to Haunt Jobs Picture
I was waiting for some enterprising conservative to make the argument that global warming improved the jobs landscape, because it turned certain industries like construction into more year-round pursuits. Of course, to make that argument, they’d have to acknowledge the existence of global warming. But they would have been missing what happens after the catch-up growth from unseasonably warm weather ends as America shifts into warmer months. The catch-up growth just moves economic activity forward, and the same seasonal adjustment models that didn’t catch job growth in January and February, according to this theory, caught too much in March:
Economists say the mild winter has artificially inflated job growth. February alone stole as many as 72,000 positions from March and future months, according to Macroeconomic Advisers.
Translation: The surge in hiring early in the year may not be as strong as it appeared […]
Typically, these bumps in demand are evened out through a process called seasonal adjustment. That allows researchers to compare one month’s economic activity with the next for a more accurate picture of the nation’s health. But this year’s weather was so abnormal that those models fell short, and economists are now scrambling to figure out how much of the growth over the past three months was simply due to a glitch in their systems.
“When the weather does not follow a normal seasonal pattern, then the seasonal adjustment cannot adjust for it,” said Chris Varvares, senior managing director and co-founder of Macroeconomic Advisers.
As Dean Baker explains, warm weather-sensitive jobs were just pulled forward, and so less new hiring resulted in March because it had already occurred in January or February. And that could continue in subsequent months. It also helps overall that workers pocketed more money in those early months. But if it’s project work, like construction, eventually the project ends.
Of course, economists cannot agree on whether construction workers are having a worse time of it in the Great Recession, so it’s less likely they’ll come to a conclusion about the impact of high temperatures on their jobs.
What none of this analysis takes into account is the devastation we will see from years upon years of higher temperatures and a warming planet. That paradoxically may be good for construction because so much will have to be rebuilt. But that hardly bodes well for the economy as a whole.