Friday, November 8, 2013

US Adds 204,000 Jobs in October Despite Government Shutdown

The Bureau of Labor Statistics today released its report on the October employment situation. Observers who have been apprehensive about the impact of the partial government shutdown will find the headline numbers surprisingly good. Nonfarm payroll employment increased by 204,000 jobs. The unemployment rate was up, but only by a whisker, rising from 7.24 to 7.28. However, for a number of reasons, these numbers do not fully reflect the impact of the shutdown on the economy.

Let’s begin with the payroll numbers, where the explanation is fairly simple. Payroll jobs are based on a survey of employers. They report how many employees worked or received pay for the pay period that included a certain reference date, in this case October 12th. Even though the reference date fell during the shutdown, all federal workers, whether on furlough or not, met this requirement, thanks to the generosity of Congress, who decided to award them back pay for days not worked. For that reason, the shutdown had no effect on the number of federal payroll employees. There could well have been effects in the private sector, for example, if a hotel near a national park sent workers home for the season who otherwise would have stayed through the end of October, but those effects were evidently small.

What is more, payroll job numbers for August and September were revised upward by a total of 60,000 jobs. When we take both the new data and the revisions into account (as shown in the following chart), recent payroll numbers do not look at all bad. The 605,000 job gain over the three months from August through October is a healthy improvement from the 452,000 for May through June. (Of course, the September and October numbers are still subject to final revision, so this result could change.) >>>Read more

Follow this link to view or download a classroom-ready slideshow with complete charts of the latest employment situation

1 comment:

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