The Star Beacon; Ashtabula, Ohio

World, nation, state

November 11, 2013

The shutdown’s surprise effect on jobs numbers

WASHINGTON — The government shutdown may have affected October’s jobs numbers. But not how you think.

For weeks, the White House had braced for a dour report on hiring, with economists and aides lowering expectations and blaming last month’s partial shutdown for the inevitable bad news to come.

Then Friday’s numbers materialized: Employers appeared to have ignored the shutdown and hired away, to the tune of 204,000 jobs in October.

The shutdown, it seemed, had had no effect.

Not so fast.

In the height of irony, the 16 days of federal worker furloughs and government disruptions may have helped, not hurt, the improved jobs picture.

Typically, jobs numbers are announced on the first Friday of the month. Because of the shutdown, the Bureau of Labor Statistics delayed the release of the jobs numbers by one week to allow more time to collect payroll and household data. That extra time resulted in an above average response rate for payroll data.

So, not to get hung up on numbers, but the average participation rate by employers in payroll surveys for the nine months before October was 76.4 percent. That meant that in subsequent months, as more data was collected, the hiring numbers were adjusted, often upward.

In October, with an extra week to collect data, the participation rate was 83.5 percent, the highest ever.

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 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.

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