Fed Isolates Weather From Weakness as Growth Cools: Economy

This year’s harsh winter is causing the pace of U.S. economic growth to fall along with the mercury.

February payrolls may be the next victim of the severe weather that has gripped the country during the last three months, following disappointing data on retail sales and manufacturing in January. This week’s snow and ice storms in the eastern U.S. came during the period the Bureau of Labor Statistics refers to in its monthly employer survey, which it uses to calculate changes in payrolls, hours and earnings for the jobs report scheduled for release March 7.

That may make it difficult for Federal Reserve policy makers to gauge whether signs of weakness can be chalked up to the elements, or if the economy has taken a turn for the worse. Firms from Goldman Sachs Group Inc. to Morgan Stanley have reduced their estimates for first-quarter U.S. growth, after forecasters entered the year with the most optimism since 2010.

To be counted as employed in the BLS survey, workers on non-farm payrolls must have received pay for some part of the earnings period that includes the 12th of the month. The winter storm may affect the February survey results if large numbers of workers had to stay home for the entire period without pay and weren’t counted.

(Source: Bloomberg)