It's Not the Snow: Job Growth Is Tanking

The monthly jobs report is out today, which gives us an opportunity to see why December's job growth was so lackluster.

Between January and November of last year, we averaged 204,000 new jobs each month. But then in December, the number plumetted to 75,000 new jobs. At the time, many commenters theorized that this drop was a statistical quirk driven by the way BLS measures employment and the fact that snow storms had caused tons of people to miss work early in the month.

If this was true, you would expect January job growth to shoot back up, not just to the 204,000 jobs a month trend, but well beyond that trend to compensate for the hypothesized undercounting in December.

But that is not what we see. Instead, January job growth was 113,000, which is lower than any month in the last year than December, well below the 204,000 trend, and well below what you would expect a month compensating for a December undercount to post.

The January numbers are subject to revision and this is only two months of bad job growth. So it is probably too early to definitively conclude that job growth is slowing down. But what we have in front of us right now points in that direction. With unemployment still outrageously high, this is an ominous indicator.