The economy added more jobs than economists expected during the month of January, but that may or may not be good news depending on your perspective.
The economy received a boost from jobs added in sectors that ordinarily wouldn't be adding jobs at this time of year if not the fact that global warming is gradually reducing the scope and severity of our winters.
Non-farm payrolls increased by 225,000 jobs last month, with employment at construction sites increasing by the most in a year amid milder-than-normal temperatures, the government’s survey of establishments showed. [...]
Economists polled by Reuters had forecast payrolls would rise by 160,000 jobs in January. Some said the unusually warm weather was likely throwing off the model the government uses to strip out seasonal fluctuations from the data, juicing the numbers. With the coronavirus hitting the Chinese economy hard, U.S. payrolls growth could slow in the coming months.
“Until it is clear that the hiring was due to an upward shift in the overall economic growth rate, we have to assume that there are weaker numbers coming sometime during the next few months,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.
Although the numbers for January were better than expected, the Labor Department also revised reports from last year to show that the economy added 514,000 fewer jobs between April 2018 and March 2019 than previously reported.
In any case, if the Labor Department really did 'juice the numbers,' it's possible the numbers will be revised downward in the coming months as they typically are under Trump.
Today's report from the Labor Department also included revisions suggesting that we haven't been accurately accounting for the damage Trump's trade war has done.
The economy grew 2.3% in 2019, the slowest performance in three years, after logging 2.9% growth in 2018. Growth this year is seen around 2%. The benchmark revisions left job gains in 2019 at 2.1 million, the fewest since 2011. [...]
Economists said the size of the benchmark revisions, which showed substantial downgrades to manufacturing employment from August through December 2018, suggested the government might not be fully capturing the impact on payrolls of Trump’s 19-month trade war with China, which has contributed to the longest downturn in business investment since 2009.
“Tariffs hit activity and employment in a way that the BLS did not incorporate at the time,” said Samuel Coffin, an economist at UBS in Stamford Connecticut. “We believe the same is happening now.”
If "the same is happening now," it seems reasonable to infer that the effect would be even more pronounced now because Trump's trade war expanded in scope since December 2018. Trump increased the size of his previous tariffs and imposed additional tariffs in the last year.
I don't know how much we should read into it, but job growth in the last year was as low as its been since we emerged from the Great Recession based on today's revisions.