Government shutdown: Jobs report is missing in action. Here's another take.

Government shutdown is expected to delay Friday's jobs report, but there are alternative measures: The ADP job report, released Wednesday, puts job creation for September at 166,000.

|
Mike Blake/Reuters/File
A help wanted sign is posted on the door of a gas station in Encinitas, Calif., on Sept. 6. The last unemployment report that the US government released showed weaker-than-expected hiring and a drop in the jobless rate as many Americans gave up the hunt for work.

Each month, there’s usually one number that economists and Wall Street investors watch above all else: the Labor Department’s tally of jobs created by US employers.

It’s a gauge of the job market – to most Americans the most basic indicator of prosperity and well-being. Beyond that, it’s a broad barometer of the economy’s health.

And this month, it’ll be missing in action.

At least that’s the way it appears so far, due to a partial shutdown of the federal government, which took effect Tuesday because the parties in Congress are at loggerheads over federal spending and President Obama’s health-care reform law.

With the shutdown on, don’t expect a Labor Department jobs report as usual this Friday. Instead, the best read of the job market so far comes from the private-sector firm ADP, which releases its own estimate of private-sector job creation each month, a couple of days ahead of the Labor Department's.

That ADP job-creation total for September, released Wednesday, is 166,000.

This net number of jobs created in the private sector is a bit below what economists were expecting in both the ADP and the Labor reports. But it’s also a bit stronger than the prior month.

The economic import: Job creation was at least chugging along, although still at a tepid pace, prior to the federal shutdown.

Paul Ashworth, chief US economist at Capital Economics in Toronto, calls the ADP number “relatively disappointing.” Economists were expecting a figure of about 180,000, and monthly numbers topping 200,000 would be more encouraging at a time of still-high unemployment.

Mark Zandi, chief economist of Moody’s Analytics, which collaborates with ADP in releasing the report, said, “The job market appears to have softened in recent months. Fiscal austerity has begun to take a toll on job creation. The runup in interest rates may also be doing some damage to jobs in the financial services industry.”

Still, both he and Mr. Ashworth see some resilience in the job market.

Ashworth, in a written analysis Wednesday morning, cites a relatively upbeat trend in claims for unemployment benefits, running at about 300,000 per week. “And yesterday we learned that the ISM manufacturing employment index strengthened further in September.”

A huge question, of course, is what happens next.

If the government shutdown lasts longer than a week or two, it could do some noticeable damage to the private-sector economy – temporarily dampening consumer spending as throngs of federal employees remain on unpaid furlough.

Beyond that, Congress soon will need to act to raise the nation’s debt limit, the amount the Treasury is allowed to borrow to help pay national bills. If the partisan standoff in Congress delays action on the debt ceiling, the economic consequences could quickly become more serious.

Back in 2011, the last time Congress stepped near the brink of a default on federal obligations, the stock market dropped significantly, and Standard & Poor’s downgraded its rating of US sovereign debt.

Many prognosticators are hopeful that the fiscal debates in Washington will be resolved, at least temporarily, in a way that allows the economic recovery to continue.

ADP is a large provider of payroll-processing services for employers, and derives its job estimate from trends in its own business. The monthly reports tend to track fairly closely with the Labor Department’s own estimates, which are based on employer survey responses.

Another estimate, by the firm TrimTabs and based on daily withholding-tax flows, estimates that the economy added 159,000 jobs in September.

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

QR Code to Government shutdown: Jobs report is missing in action. Here's another take.
Read this article in
https://www.csmonitor.com/Business/2013/1002/Government-shutdown-Jobs-report-is-missing-in-action.-Here-s-another-take
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe