Nonfarm payrolls fell by 36,000 in the advance estimate for February, and would have likely been positive if not for the weather. It’s impossible to estimate precisely the impact that the snowstorms had on payrolls and average weekly hours, but we should see a rebound in the March employment figures. Hiring for the 2010 census is underway, and is expected to peak in May. Unfortunately, those temporary census jobs will be shed in June and the months that follow. Still, looking beyond the impact of the census, job growth is nearly here.

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Weekly Commentary by Dr. Scott Brown
On The Cusp Of Job Growth
March 8 – March 12, 2010
Nonfarm payrolls fell by 36,000 in the advance estimate for February, and would have likely been positive if not for the weather. It’s impossible to estimate
precisely the impact that the snowstorms had on payrolls and average weekly hours, but we should see a rebound in the March employment figures. Hiring for
the 2010 census is underway, and is expected to peak in May. Unfortunately, those temporary census jobs will be shed in June and the months that follow. Still,
looking beyond the impact of the census, job growth is nearly here.
While the housing bubble was the catalyst for economic weakness and excessive leverage in the financial sector was a compounding factor, the most unsettling
factor in the recession was the collapse of confidence in the fall of 2008. The thing about panics is that you don’t simply unpanic and get back to normal. It takes
a long time for confidence to be restored. Worried about weak economic conditions, firms cut back on capital expenditures and trimmed their workforces. In a
way, the worst part of the downturn was a self-fulfilling prophesy.

2. Recovering from the depths of the recession was going to take some time. The fiscal stimulus package may not have immediately resulted in employment
growth, but it kept job losses from being more severe. Some of the stimulus was cast as aid to the states – effectively, plugging holes – preventing budget
shortfalls from causing sharper job cuts. Unfortunately, state budget strains are not going to go away anytime soon. Efforts to reign in state deficits, whether
through tax increases or spending cuts, have a contractionary impact on growth.
The fiscal stimulus is currently peaking, but the maximum impact on GDP growth is already behind us. The stimulus has checked the decline in business
confidence, but has yet to create much optimism. That will come from improvement in the private-sector economy over time.
The data show that the pace of private-sector job destruction declined significantly over the course of last year. Private-sector payrolls fell by 18,000 in February.
That compares to a 707,000 drop in February 2009. If not for the snowstorms, private-sector job growth would likely have been positive last month.
Many schools, government agencies, and businesses were closed temporarily due to the snow (government payrolls fell by 18,000, despite an apparently census-
related gain of 16,100 in federal government ex-the U.S. Postal Service). In the establishment series, anyone who works anytime (even an hour) during the
survey week (the pay period that includes the 12th of the month) is counted as employed. So not all business closings lead to reductions in official payroll figures.

3. Last week, Congress worked toward passage of a jobs bill. From an initial target of $80 billion or more, the package was whittled down to $15 billion. That’s not
much considering that we’ve lost 8.5 million jobs since the start of the recession. The main part of the bill will be a temporary reduction in payroll taxes paid by
employers.
Hiring for the 2010 census has begun. In 2000, census hiring was strongest in March and May. The census will have 800,000 temporary jobs at the peak,
although some workers could have more than one job (the largest part, at 635,000, is for the non-response follow-up). How long these workers are employed by
the census will depend on the survey response rates. Anti-government sentiment could lead to a higher percentage of non-responses this year. In 2000, temporary
census jobs were unwound mostly from June to September.
Beyond the impact of the census and the pending jobs bill, private-sector job growth should pick up over time. However, the economy still faces a number of
serious headwinds, which will likely keep job growth moderate this year.