Now comes before us FT Alphaville's Cardiff Garcia:
Weather it’s worth worrying about, who knows
A chart from Credit Suisse (click to enlarge for a clearer picture):Making weather puns is a breeze.
The strategists add:The debatable contribution that weather may have had in the December payroll number appears unlikely to repeat itself this Friday, judging by the weather conditions prevailing during the January survey week.Despite the warmer survey week, the labour market might still have had lingering effects from December (nearly all of which was colder than average — more on that below).
As illustrated in Exhibit 11, the unusually cold weather experienced during the December payrolls survey contrasts noticeably with the unusually warm temperature observed during the January payrolls survey week. Not only was temperature higher than average for January, but also snow depth, as estimated by the National Operational Hydrologic Remote Sensing Center, appears to have been lower than the recent average for January.
Friday’s report will also be complicated for other reasons, and the status of US economic recovery will remain uncertain given the number of disappointing economic indicators in recent weeks. But a “normal” payrolls number — say, something above 150,000 — would at least suggest that December really was a fluke.
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But whatever its impact on the payrolls report, here’s an observation from Bank of America Merrill Lynch on the historical relationship between cold weather and growth, and how it might affect growth in the first quarter...MUCH MORE
