Tag Archives: labor market

(revised) Good news for labor market?

Thanks to the stopped beneficial plan, we witnessed a decreasing unemployment rate ever since last December. But this can never be a good news since the true reason behind all this is more and more people ceasing to spend any effort to find a job in the labor market. As mentioned in my past post, the participation rate in labor market has been reduced to 63.2%, according to the data from WSJ.

Nearly 1.4 million people lost payments when the federal benefits expired on Dec. 28, which directly caused 347,000 people to quit the competition of labor market, according to CNN. Last Friday, the Bureau of Labor updated its latest data for unemployment rate, it seems the rate remained at 6.7% which is same as last update. The peculiar thing here is that as over 192,000 new jobs were created, there is no sign of any change in the unemployment rate, the only explanation is that more people entered job market and got average result. As mentioned by Phil Izzo in WSJ, after many months of people giving up the job search, that could be an indication more people are coming off the sidelines and back into the labor force.

However, the way I interpret this issue is not that optimistic. Below is the graph generated in FRED:

age

In the graph, the middle orange line is the total trend of participation rate, we can see that it’s been declining much (about 5%-6%) since the recession. It is clear that participation rate at age 25-54 does not changed much (about 2%-3%), and the participation rate at age over 55 has been improving even after the recession. From the graph, we can see that the main forces that dragged the total participation rate down is from the age 20-24 and age 16-19 parts. That’s totally reasonable since both the red line (age 20-24) and blue line (age 16-19) have two same characteristics: volatility and cyclicity. People at that age are mostly students, and for students their participation in job market will raise in June and July and decline in other months. We can see that the trends for both lines are in the rising cycle, this explains why we experienced a boost in job market participation recently.

Now it is clear that the situation is not exactly like what Phil thought, we can have an optimistic anticipation now because more and more student are looking for or already found their jobs. And I would say that after this July the participation rate will suffer from another loss. From the trends showed in the graph, we are still losing more and more job market participation because the main trends of both lines are still downward.

If there is any good news that even exist, it will be that those downward trends are slowing down compares to years before. We can see more update about this in the future.

 

 

 

What does labor market slack look like?

In her remarks at the Economic Club of New York Wednesday, Janet Yellen focused on the things that the FED would be watching closely going forward.  The chairwoman made it clear she was more concerned with continued low prices then with inflation exceeding the 2% target set by the central bank. However, the FED’s primary focus remains on the labor market.  Fixing this market might take more then just monetary policy.

The Labor market has been characterized as having significant “slack” in it.  This term accurately describes the ability for businesses to add jobs with out having pulling up wages.  An increase in wages could cause inflation, so the FED is closely watching the labor market for signs of tightening.

What makes up this “slack”?  The Federal Reserve Bank of Atlanta publishes what is known as the Labor Market Spider Chart.  The chart provides a comparison of many labor market metrics at various times in one chart.  An image is shown below, but the link is interactive, so I encourage you to check it out.

Levels-Spider-Chart-from-the-Atlanta-Federal-Reserve-961x1024

This chart has a lot of information in it.  Most notably that there are a large amount of people working temporarily and part-time then would be in a healthy labor market.  There is also a dramatic decrease in marginally attached workers, are the discouraged workers who have worked or looked for work in the past year.  Given the other factors in this chart, some of this decrease may be due to workers giving up entirely and dropping out of the labor force, as opposed to actual hires, which are slightly worse then in 2012.

Janet Yellen would also mention that she believes that the economy can reach healthy levels in the employment market by 2016.  If the spider chart can be used to visualize labor market slack, then it can show tightening as well.  The Other parts of the circle need to shift out to their pre-recession levels as well.

There is a slight symmetry to the above graphs.  Hires on the right have to have some effect on job finding rate on the left.  Similarly with job openings and job availability.  Whether the FED alone can institute the policies needed to bring about the needed changes is unclear.  There is a lot of work to do.  The president of the Minneapolis Federal reserve bank, Narayana Kocherlakota has suggested certain fiscal polices that models suggest could result in the needed growth.  However, even if these policies where implemented, 2016 may be a very ambitious goal.

 

Good news in the labor market?

Thanks to the stopped beneficial plan, we witnessed a decreasing unemployment rate ever since last December. But this can never be a good news since the true reason behind all this is more and more people ceasing to spend any effort to find a job in the labor market. As mentioned in my past post, the participation rate in labor market has been reduced to 63.2%, according to the data from WSJ.

Nearly 1.4 million people lost payments when the federal benefits expired on Dec. 28, which directly caused 347,000 people to quit the competition of labor market, according to CNN. Last Friday, the Bureau of Labor updated its latest data for unemployment rate, it seems the rate remained at 6.7% which is same as last update. The peculiar thing here is that as over 192,000 new jobs were created, there is no sign of any change in the unemployment rate, the only explanation is that more people entered job market and got average result. As mentioned by Phil Izzo in WSJ, after many months of people giving up the job search, that could be an indication more people are coming off the sidelines and back into the labor force.

However, the way I interpret this issue is not that optimistic. Below is the graph generated in FRED:

age

In the graph, the middle orange line is the total trend of participation rate, we can see that it’s been declining much (about 5%-6%) since the recession. It is clear that participation rate at age 25-54 does not changed much (about 2%-3%), and the participation rate at age over 55 has been improving even after the recession. From the graph, we can see that the main forces that dragged the total participation rate down is from the age 20-24 and age 16-19 parts. That’s totally reasonable since both the red line (age 20-24) and blue line (age 16-19) have two same characteristics: volatility and cyclicity. People at that age are mostly students, and for students their participation in job market will raise in June and July and decline in other months. We can see that the trends for both lines are in the rising cycle, this explains why we experienced a boost in job market participation recently.

Now it is clear that the situation is not exactly like what Phil thought, we can have an optimistic anticipation now because more and more student are looking for or already found their jobs. And I would say that after this July the participation rate will suffer from another loss. From the trends showed in the graph, we are still losing more and more job market participation because the main trends of both lines are still downward.

If there is any good news that even exist, it will be that those downward trends are slowing down compares to years before. We can see more update about this in the future.

 

 

 

Inflection Point for U.S. Economy: And Perhaps the World

The United States economy seems to be at an inflection point in which growth will either accelerate above the trend or remain below. The March Employment report had some very positive signs, which showed that more people are finding jobs. According to the Wall Street Journal, “All of the gains came from private companies, which added 192,000 jobs. The March gain means the private sector has regained all the positions lost in the recession”. Although the 192,000 jobs added was just below forecasts, I think it is a strong number that proves the December and January employment reports were outliers that were negatively impacted by severe winter weather. The recovery has been painfully slow in the labor market, but the March employment report was a significant step in the right direction. The better level of hiring, as evidenced by the March employment report, will hopefully give a boost to consumer confidence and in turn support consumption expenditures.

According to Ray Dalio, credit expansion and credit contraction essentially determine booms and busts in economic business cycles. Following many years of expansion, the credit market collapsed in the recent financial crisis. Thus, the health of private credit markets is central to the current inflection point of the U.S. economy.

fredgraph_credit

As seen above, the year over year percent change in private credit has recently turned in the right direction. If credit markets continue to strengthen, households will be able to take on more leverage. An improvement in private credit conditions is indispensable to supporting the positive signs in the March employment report.

If the March employment report was so lovely and credit conditions are improving, then why the recent dip in financial markets? I believe changing expectations about future interest rates played a significant role. Expectations about interest rate increases are mid-2015 (i.e. 6 months following the end of quantitative easing) and there are concerns surrounding what the impact will be on each sector of the U.S. economy. On the one hand, financial stocks moved up on the news as they stand to earn more interest revenue from loans. On the other hand, sectors sensitive to interest rates (ex. Housing) will likely suffer when rates move up at first. For example, higher interest rates decrease affordability in the housing market and could potentially lead to decreased residential investment. A key rate to watch is the ten-year Treasury yield, which is usually considered the risk-free rate for long-term debt and is thus intertwined with many other rates.

fredgraph_10yr

The yield on the ten-year Treasury has tested 3%, but has remained below it. I believe it is only a matter of time before the 3% level is breached. As mid-2015 approaches, expectations about future rates will need to be fully priced in. As a result, a first test for the inflection point will be whether sectors that are sensitive to interest rates can handle higher rates. If all of this goes smoothly, then the United States economy could reach escape velocity and grow above the cyclical trend of 2.5%. Wonderful! Not so fast… According to the Wall Street Journal,

If the U.S. grows a half-percentage point faster than expected, it would force the Federal Reserve to raise interest rates at a quicker clip. That would boost borrowing costs for emerging markets more than many governments and investors planned, raising serious questions about the ability of countries, households and corporations to pay off their debts.

Although I am hoping for stronger economic growth in the United States, I was unaware that it might cause problems for the rest of the world. To be clear, the IMF is expecting the U.S. economy to expand at 2.8% this year and 3% in 2015. I am not sure how likely the U.S. is to grow above these levels, but I am very pleased by the signs in the labor and credit markets. Hypothetically, if U.S. economic growth takes off, then the Fed must respond quickly and effectively with higher rates despite a negative impact on the rest of the world. As the Fed demonstrated during the major sell off in emerging markets this year, the Fed’s mandate is the U.S. economy and so it must keep its focus here.

Immigration Reform: A Spark for the Economic Recovery

Although immigration reform in the United States can be extremely controversial, I believe  successful reform will greatly benefit the economy. A successful overhaul of America’s immigration policy would benefit our economy by opening our borders to highly skilled noncitizens. According to the Wall Street Journal, “The most important reason to reform immigration laws is to promote economic growth and prosperity. The U.S. has long had a generous immigration system, but it has been skewed to family unification rather than U.S. economic interests”. Considering the slow recovery from the financial crisis of 2008, I believe immigration reform could be an effective way to give the economy a meaningful push forward. The current immigration system seems outdated and reform seems in the best interest of the economy.

Attracting and keeping highly skilled workers would be a positive step toward economic growth. Highly skilled workers would provide a boost to productivity, which in turn would help increase gross domestic product (GDP). According to the Wall Street Journal, “In today’s global economy, with many rising nations, the U.S. is in an increasingly competitive contest for human capital. Yet often today the U.S. educates talented foreigners in our schools only to deny them visas to stay and work in America. The companies they create will be in China and India rather than Austin or Minneapolis”. I have always thought that it was silly for foreign students to come to the United States for a fantastic education, but not be able to stay after graduation and contribute to long run economic growth. During high school (boarding school), I lived with a foreign student who expressed the challenges he would face if he wished to work in the United States after college. Although some foreign students might (understandably) wish to return home, I think it is clearly in the best (economic) interest for the United States to retain these trained workers.

On the one hand, some see immigration reform as a boost for the economy. On the other hand, some claim that immigrants steal American jobs and depress wages. According to the Wall Street Journal, “The populist wing of the [right] wing party has talked itself into believing the zero-sum economics that immigrants steal jobs from U.S. citizens and reduce American living standards”. However, in the long run this will likely not be the case. The concern that immigrants “steal” American jobs operates under the assumption that immigrants only impact the labor supply and not labor demand. The key is that immigrants would not be substituting for American workers – instead, immigrants would complement the natural-born American labor force. Although adding more workers to the labor force in isolation would lower wages and add to the unemployment rate, this ignores the fact that new workers will also add to demand by spending the money they earn.

Successful immigration reform would provide increased productivity and higher wages once businesses expand to absorb the larger labor force and meet increased demand from a larger population. Unfortunately, promoting the benefits of long run policy can be a challenge since the long run is so intangible. As Keynes said, “In the long run we are all dead”. In the short run, the increase in demand for labor might lag behind the increase in demand for goods and services causing unemployment rate rise in the few years following the implementation of immigration reform. However, I am confident that the long run is not that far off. Ultimately, adding immigrants to the labor force should benefit the United States economy. The political landscape can be extremely challenging, but the Senate has a bill that might solve these issues. According to the Wall Street Journal, “This is why the Senate bill wisely opens the gates wider for foreign graduates and high-tech (H1-B) visas“. I am hopeful that the Senate bill will get passed and implement successful immigration reform.

The minimum wage can have major effects (revised)

Minimum-Wage-kitty-520x292

Last time I wrote about how in reality, the minimum wage in America is so low that it can’t even get the average person working full time earning it out of poverty.  It is low enough that some think it may be acting as a barrier to social mobility, a defining trait of the United States.  By considering what has happened in the past after wage increases, it will be clear that the only negative effects of increasing the minimum wage is on measurements of poverty.

While It seems obvious that increasing the minimum wage would decrease poverty (the wages increased, not the poverty level), there are those that argue it will have a negligible affect, since many poverty stricken people don’t work for the minimum wage.  Even though the increase can’t end poverty, as we will see, it can have an effect on it, and can therefore be an effective tool for addressing it.  Economic theory also predicts that with an increase in the price of labor the demand for labor would decrease, resulting in lost jobs.  This notion is not consistent with past results of minimum wage increases.

First, Consider Washington, the state with the highest minimum wage in the country at $9.32/hr., with future increases tied to the consumer price index.  Surely such an extreme example should support the assertion that increasing the minimum wage results in lost jobs.  In the 16 years since the law went into effect, Washington has been above the national average with respect to job growth.

Perhaps Washington was a fluke.  An even more extreme example can be found in San Francisco, which has gone to an inflation adjusting $10.74/hr., the highest minimum in the country at any level.  In addition it has laws requiring paid sick leave and health care spending.  What it doesn’t have is the predicted job loss. This can be seen in the following graph, which tracks the effect on the San Francisco restaurant industry, which employs the largest amount of minimum wage employees.

2023116010_t670As can be seen, it tracks the surrounding counties quite well, showing no large deviation, except perhaps a small increase of hiring after the addition of paid sick leave. Since San Francisco’s minimum wage laws don’t bind the surrounding counties, it is clear that the increased minimum wage, along with other benefits, have not resulted in job losses.  If two of the most extreme cases of minimum wage increases have not resulted in less jobs, there is little support to think that lesser hourly rates would result in any significant losses.

There are less surprising results for the economy, government spending, and businesses.  In this letter from the Chicago FED the effects of a $1.75 hike in the minimum wage are analyzed.  It finds that such an increase could lead to an increase in aggregate household spending, even after accounting for spending that was lost to increased costs.  Additional research also estimates that an increase in the minimum wage could result in a decrease in government spending for the SNP program (food stamps).   A growing collection of research shows that businesses that pay a higher wages receive less theft, higher productivity, and increased worker retention.

Having seen that increasing the minimum wage won’t harm society, we consider the economic outcomes of the workers themselves.  Research by Dube provides insight into how such increases have affected workers in the past.  Tracking the effects of the minimum wage on the distribution of family income from 1990 to 2012, he finds that the coefficient on the elasticity of the poverty rate is a statistically significant -.24.  Also statistically significant (at the 1% level) is the -.32 and -.96 coefficients on the poverty gap and gap squared terms, measures of how poor the poorest families are.  This provides evidence that “…minimum wage increases do not reduce poverty by merely pushing some families above the poverty line, but rather by increasing incomes substantially and further below the poverty line.”  More concisely, increasing the minimum wage decreases the portion of the population in poverty, as well as the depth of poverty.

Increasing the minimum wage is one of the most effective tools the federal government has to fight poverty.  The minimum wage should be increased to at least the same $10.10 an hour earned by federal contractors.  Past experience has shown that this will not result in the job loss that is threatened by businesses.  It is time for the United States to take the steps needed to guarantee that a full time worker makes a wage they can live on.

 

Fed fails to indicate what labor market signal will be

The Fed announced today that it will continue its tapering program, reducing purchases of long-term Treasury bonds from $35 billion per month to $20 billion per month, and cut back on its mortgage-backed securities purchases by $5 billion as well, to $25 billion. These results came as expected, with the $10 billion monthly decrease continuing each month. The bigger news was the Fed’s announcement on whether it will start to bring rates back up as the targeted 6.5% unemployment rate is due to be met in the upcoming weeks.

On Wednesday, the Wall Street Journal reported that “the Fed dropped the reference to the 6.5% jobless rate, which officials have come to see as too limited an indicator of the labor market’s health.” The proclamation of being “too limited an indicator” tells true, as unemployment rates have sunk in some part due to discouraged workers dropping out of the work force entirely after failing to find employment. However, the Fed offered little insight on what they believed better labor market indicators to be, or when they will determine that the economy has shown enough recovery. The stock market fell after the news, on the idea that rates may be rising sooner than previously expected.

The majority of Fed officials on Wednesday predicted that rates will begin to increase within the year, with 10 of 16 expecting increases to begin in 2015. The real news of the day was the ambiguity that the Fed left in its wake. Will a 6% unemployment rate be enough to spark a rate increase, or is the unemployment rate now discredited by the Fed as a worthy indicator? What should Americans expect moving forward, and when will the recession really end? According to Fed Chairwoman Janet Yellen, a multitude of factors will tell her when the time is right.

“Ms. Yellen said her dashboard for monitoring economic progress would include
the share of workers who have been unemployed for six months or more, the share
of adults who are holding or seeking jobs and the portion of workers who hold
part-time jobs but say they would rather have full-time occupations.” – WSJ

So while the news coming out of the meetings leaves more to be desired in terms of understanding the actual state of the economy and strength of the labor market, expectations can be made moving forward. All indicators show that the tapering process will continue as planned, $10 billion less bond purchases happening each month, and depressed rates while inflation sits below its targeted level. While the new measure for the state of the labor market certainly is more indicative of its actual all-around health, the Fed left much doubt for when it will finally be ready for a rate increase.

Increase the minimum wage to preserve social mobility

Greg Mankiw’s post this past Thursday regarding the minimum wage begs for discussion.  Perhaps it is because the post is nothing more then two links.  The issue of raising the minimum wage however is not that simple. Those that support an increase point to all the people that it could help, and argue that it wouldn’t cause damage to the recovery and may even help it.  Those that oppose the increase marginalize the effect and worry about distortions of the labor market.  While there is research to support the case that no negative effects would come from the increase, I feel there is a stronger case to be made.  While many are troubled by income inequality, I feel that a certain amount of inequality is both good and necessary.  What is far more important is social mobility.  The Federal Government should increase the minimum wage in order to maintain the social mobility that is critical to the United States economy.

Increasing the minimum wage can increase social mobility directly.  There is a lot of research to support the claim that an increased minimum wage results in things like increased productivity, higher employee morale, and increases employee retention.  Happy employees that are more productive and work at a job longer don’t stay entry level for very long.  By increasing the minimum wage, you can increase the workers chance of gaining the skills they need to command a bigger wage.  More money also makes it easier for them to make the decisions needed to get out of poverty, as research shows that those living in poverty actually suffer cognitive impairment because of it.  A little bit more of a margin for error could be all someone needs to be able to consistently make the decisions necessary to improve their life.

The current federal minimum wage is at $7.25/hr.  $7.25/hr. is low, representing roughly $15,000 a year, which is barely more then the federal poverty level for an individual of $11,670, before taxes.  Increasing the minimum wage to the requested $10.10/hr. may prove to have too much opposition, as the Congressional Budget Office predicts that could cost up to a million jobs through 2016.  In order to expedite the process by removing such arguments against an increase, an increase to $9/hr. could be implemented.  As the CBO paper shows, this would result in far fewer predicted losses.  It would also raise the annual income to $18,720/year, which provides a little breathing room above the poverty level.  It should be noted that states would still be able to increase their minimum wage if they felt conditions warranted an increase.  For instance, San Francisco has a rate of $10.74 (and an unemployment rate of 4.8%, well below the national average).  This reflects both the higher cost of living in the city, as well as the lack of negative effects of increasing the minimum wage, despite serious income inequality.

The opponents of the increase are right about something though. Increasing the minimum wage will not fix is poverty.  But this shouldn’t be the revelation that the opposition makes it out to be.  If minimum wage laws fixed poverty, then why are we still dealing with it?  Poverty is a complex social issue that depends on more then just income.  Increased social mobility can aid in the fight against poverty, by making it easier to better oneself and rise out of poverty.

The minimum wage in 1960 was $1.60/hr.  Adjusted for inflation, today that is $10.56/hr.  Increasing the minimum wage, and the benefits that come with it like worker retention and increased productivity increase social mobility by creating paths out of poverty.  Even though you can’t make someone take such a path, it must be available to everyone.  To encourage this, the minimum wage should be increased to at least $9/hr. in order to preserve the social mobility that has been a hallmark of the United States since it was founded.

Machines in the Workplace

This past week, innovators, artists, and attendees flocked to Austin, Texas to take part in the annual South by Southwest festival.  The festival is known for bringing together some of the brightest minds during the SXSW interactive festival.  As described by SXSW, the interactive festival is an “incubator for cutting edge technology and digital creativity”.  This year, there was a session that highlighted a topic that I found extremely interesting.  Carl Bass, the CEO of Autodesk, gave a session about the automation of the workplace and how machines are becoming increasingly more relevant in today’s job market.  He believes that machines will continue to supplement humans in the manufacturing sector and other industries like trucking.  The question that was brought up during this session was whether or not the takeover of jobs by robots was a good thing.  As economists, we know that this shift in the labor market will be a good thing because it will lead to greater innovation and economic output.  You can compare the automation of manufacturing jobs to the creation of the assembly line by Henry Ford.  It revolutionized the manufacturing process and made it increasingly more efficient.  Carl Bass believes that the automation of manufacturing jobs and other blue collar jobs is a good thing.  Yes it will take the jobs away from humans, but I believe he asks a very smart question.  Bass asks, “What parents would want their kids in theses types of jobs?”  Fewer and fewer parents want to see their kids in the jobs that these machines can do.  Bass gives the example of fuel pumpers and elevator operators, jobs that have already become automatic.  No parent would want to see their kid in those types of jobs.

After reading about Bass and his SXSW session, I found a Bloomberg article that showed a different side of smart machines.  Two PhD economists from Oxford have been running analysis recently that shows jobs that used to be considered “safe havens” were one by one, becoming threatened by more intelligent machines.  47% of occupations that Americans had in 2010 were now considered at risk, or machines were capable of doing those jobs.  While these new algorithms and smart computers will make it more difficult for the labor force, people are already seeing benefits.  A startup that uses an algorithm to replace loan officers has found that the machines, on average, offer a interest rate 8.8% lower than credit cards.  Companies are able to pass the savings from not having to pay loan officers, onto their customers through lower interest rates.  While it is beginning to look like machines can challenge humans for jobs, human cognition is still something that computers can’t account for.  Until computers can reach the level of human cognition, which according to the director of the Stanford Artificial Intelligence Laboratory is decades away, we don’t have to worry about any Terminator type scenario any time soon.  At the end of the day, the increased efficiency will help consumers out in the long run and benefit the overall economy.  Technological growth is always beneficial for the global economy.

A glimmer in the snowy U.S. economy

Trying to interpret economic data these days is a bit like trudging to class through the snow. There are a lot of obstacles to get through before you accomplish anything. Let’s begin on February 6, when the Wall Street Journal reported that the recovery is looking good with jobless claims falling and worker confidence increasing. Smooth sailing, at least until seven days later when WSJ experts indicated that a worrying sign had appeared as weekly jobless claims increased. This complete 180 induced a handful of articles fretting about low February growth and predicting an even slower recovery going forward. It seems they forgot that labor market turbulence and declining retail sales early in the year is expected due to the many shortened workweeks (this week included thanks to President’s day) and weather volatility.

There is no doubt that a lot of the nervousness following the past few weeks can be attributed to the weather. In fact, I believe that nearly all of it can. This simply isn’t an ordinary winter, or one that was predicted by economic forecasters. Last week, the U.S. Department of Commerce reported that retail sales fell 0.4% from December (see full report here). In particular, motor-vehicle and parts sales were down more than 2%, and different retail markets were down somewhere in the 1% range depending on the industry. According to WSJ authors Josh Mitchell and Sarah Portlock, “it’s more than just the weather that’s behind the malaise.”

It can’t be understated that this is not just another winter putting a freeze on the economy. In fact, Detroit’s January was the snowiest on record. Combine that with being the 15th coldest month ever, and its no wonder consumers are forgoing their trips to their favorite department stores. Restaurants and bars also have taken a hit this winter, as chilly consumers opt to cook and spend their evenings at home. The astounding part of 2014’s cold start is the huge scale of its impact. Sure, Detroit residents are used to chilly, snowy evenings. But how about Atlantans?

“Jake Maguire, a 28-year-old from Atlanta, said snowstorms there have kept him and his friends away from their favorite restaurants and bars, which they frequent multiple times each week. Instead, they’ve opted to hang out at home, in front of the fireplace, drinking their own hot toddies—a hot drink with whiskey—and cooking whatever was on hand.”
-Mitchell & Portlock, WSJ

Jake, like so many others, has stayed in and saved his money this winter. For me, hearing that the retail economy has only suffered a 0.4% decline from a gift-giving December is almost good news. Sure, it’s a short-term contraction, but the Fed seems to agree that economic conditions are continuing to improve as it plans to move forward with its tapering into March. Labor markets have had a minor setback as many construction projects and outdoor work has had to be postponed, but these projects will come when the snow goes. So while reports may continue to flip-flop their forecasts for the next couple of weeks, it’s important to take it with a grain of salt. The economy, and hopefully the weather, will soon heat back up.