US Government Shutdown Could Distort Jobs Report
By CHRISTOPHER S. RUGABER
WASHINGTON (AP) a¿¿ The big question ahead of Friday's release of the October employment report: How much did the 16-day partial government shutdown affect hiring last month?
The shutdown may have caused the unemployment rate to spike and hiring to slow. If so, economists expect those trends will be mostly reversed in November.
"The government shutdown has created a lot of noise and the numbers are going to be sloppy," said Phil Orlando, chief equity strategist at Federated Investors.Economists forecast that employers added 122,000 jobs in October, according to a survey by FactSet. That's sharply lower than the 148,000 added in September. And it would be well below the average job gain of about 180,000 in the first nine months of this year. The unemployment rate is projected to rise to 7.3 percent from 7.2 percent, the first rise since May. Some economists fear the shutdown could cause unemployment to jump to 7.6 percent. A large impact by the shutdown could make it difficult for economists to spot any underlying trends. They may place less weight than usual on October's report. The Federal Reserve may also look past both October and November's reports because of the distortions. That's a big reason many economists expect Fed policymakers won't pull back on their stimulus efforts until next March. About 450,000 government workers were furloughed during the shutdown. Some employees at government contractors were also likely put on temporary layoff. And workers at restaurants, retail stores and other businesses located near national parks or federal buildings that were closed also likely cut back on staff. Workers on temporary layoff would be classified as unemployed for purposes of the unemployment rate. That could cause the rate to jump. But furloughed workers would still be counted as employed by the government's survey that counts jobs. As a result, hiring may not look as bad as the unemployment rate.
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