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Government Shutdown's Surprise Effect on Jobs Numbers

"Businesses may have inadvertently counted employment for an extra week," said Mark Zandi, chief economist at Moody's Analytics. "That could juice up the number. That may mean that we actually get surprised next month with a much weaker number."

The shutdown had another effect on the employment data.

Besides conducting a survey of employers, which gives data on actual hiring, the government also surveys households to determine the unemployment rate.

Furloughed federal employees were considered unemployed during the shutdown and thus contributed to the increase in the unemployment rate in October from 7.2% to 7.3%. Without the furloughs, the unemployment rate would have dropped.

Complicating things, some furloughed employees were counted as still employed. As a result, if they had been properly listed as unemployed, the jobless rate for October could have been higher than 7.3%.

But those are temporary anomalies and they won't affect the November unemployment rate.

Even with data showing more hiring in the month, President Barack Obama on Friday stuck with the White House theme that the shutdown "harmed our jobs market."

"The unemployment rate still ticked up and we don't yet know all the data for this final quarter of the year, but it could be down because off what happened in Washington," he said.

The data did have some warnings. Americans' participation in the labor force went down.

"Even factoring out the impact of the shutdown, we have a lot fewer people in the labor force than you'd expect," said Jared Bernstein, senior fellow at the Center on Budget and Policy Priorities and former economic adviser to Vice President Joe Biden. "That pushed the unemployment rate down because they are not looking and it takes away from growth."

Then he apologized for being a two-handed economist: "I consider the report evidence of a resilient American economy on the one hand, but some pronounced remaining weaknesses on the other."
Copyright 2013 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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