by Calculated Risk on 4/08/2020 09:42:00 AM

Even before the negative impact from COVID-19, the employment report in March was going to be disappointing. This is because the better than normal weather boosted employment gains in both January and February, and there was going to be payback in March. The question is: how much?

The San Francisco Fed estimates Weather-Adjusted Change in Total Nonfarm Employment (monthly change, seasonally adjusted). They use local area weather to estimate the impact on employment. For March, the BLS reported 701 thousand jobs lost, the San Francisco Fed estimates that weather adjusted employment losses were 617 thousand.

This suggests weather payback (from previous months), would have reduced March employment by over 80 thousand - and the March report would have been disappointing even without the pandemic.

Given the current circumstances, this is mostly irrelevant.  However, if someone points to the gains in January and February, and claims that employment growth was picking up before COVID-19 - without adjusting for the weather - that would be inaccurate.