Where to start???
Okay, the government shutdown put hundreds of thousands of people out of work, right??? So by that logic the employment number should have gone down, the unemployment rate should have gone up, and the underemployment rate should have gone up.
But something funny happened along the way. Employment went UP! 204 thousand jobs when economists expected a number of 120 thousand. Why? The private sector is hiring people. The economy is doing better.
Economic Event | Period | Economic Survey | Actual Reported | Original Prior | Revised Prior |
Change in Nonfarm Payrolls | Oct | 120K | 204K | 148K | 163K |
Two-Month Payroll Net Revision | Oct | -- | 60K | -- | -- |
Change in Private Payrolls | Oct | 125K | 212K | 126K | 150K |
Change in Manufact. Payrolls | Oct | 5K | 19K | 2K | 4K |
Unemployment Rate | Oct | 7.3% | 7.3% | 7.2% | -- |
Average Hourly Earnings MoM | Oct | 0.2% | 0.1% | 0.1% | -- |
Average Hourly Earnings YoY | Oct | 2.3% | 2.2% | 2.1% | 2.0% |
Average Weekly Hours All Employees | Oct | 34.5 | 34.4 | 34.5 | 34.4 |
Change in Household Employment | Oct | -- | -735 | 133 | -- |
Underemployment Rate | Oct | -- | 13.8% | 13.6% | -- |
Labor Force Participation Rate | Oct | -- | 62.8% | 63.2% | -- |
Personal Income | Sep | 0.3% | 0.5% | 0.4% | 0.5% |
Personal Spending | Sep | 0.2% | 0.2% | 0.3% | -- |
PCE Deflator MoM | Sep | 0.1% | 0.1% | 0.1% | -- |
PCE Deflator YoY | Sep | 1.0% | 0.9% | 1.2% | 1.1% |
PCE Core MoM | Sep | 0.1% | 0.1% | 0.2% | 0.1% |
PCE Core YoY | Sep | 1.3% | 1.2% | 1.2% | -- |
Payrolls in the U.S. increased more than forecast in October, a sign that employers were optimistic the world’s biggest economy would weather the effects of the federal government shutdown.
The addition of 204,000 workers followed a revised 163,000 gain in September that was larger than initially estimated. The median forecast of 91 economists surveyed by Bloomberg called for a 120,000 advance. The jobless rate rose to 7.3 percent from an almost five-year low. The figures indicate companies adhered to hiring plans with an outlook to stronger sales in the aftermath of the 16-day budget impasse and a debate over raising the nation’s debt ceiling. The data also underscore the view of Federal Reserve officials that employment conditions are on the mend as they look beyond fiscal restraint in considering when to dial back record monetary stimulus.
Payrolls increased at manufacturers by the most since February, retailers added about twice as many workers as the month before, and leisure and hospitality employment was the strongest in six months.
The unemployment rate, derived from a separate Labor Department survey of households rather than employers, was
forecast to rise to 7.3 percent, according to the Bloomberg survey median. The household figures showed more Americans
dropped out of the labor force. The participation rate, which indicates the share of working-age people in the labor force, decreased to 62.8 percent, the lowest since March 1978, from 63.2 percent a month earlier. As many as 800,000 federal workers were furloughed during last month’s government shutdown. The Labor Department, in its survey of 60,000 households, extrapolated the effects of the impasse to arrive at the unemployment rate. Americans who weren’t working during the week spanning Oct. 6 to Oct. 12 were counted in the household survey as unemployed, even if they
received, or anticipated getting, pay retroactively, based on a statement from the Bureau of Labor Statistics.
John Broussard
Assistant State Treasurer
Chief Investment Officer
State of Louisiana
Department of the Treasury
225-342-0013
jbroussard@treasury.state.la.us
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