The Government Shutdown: Did it Hurt or Help the Job Market?
November 15, 2013 Leave a comment
Many people were upset about the Government shutdown. Some people found it petty and unnecessary, some people were affected even more when their jobs were furloughed, and others were worried what the cost was doing to the economy.
Numbers that were released last Friday show that the government shutdown didn’t have much affect on employers, who hired 204,000 people for jobs regardless.
Government workers were furloughed for 16 days, but reports are finding that somehow that might have improved the job market; although these numbers may be inflated. This is because job numbers are usually announced the first Friday of the month. Due to the shutdown, the Bureau of Labor Statistics delayed reporting the numbers, which allowed more time to collect payroll and household data.
The average participation rate by employers in payroll surveys for the nine months before October was 76.4 percent. In October with an extra week, the numbers were up to 83.5 percent.
“It seems that when the initial response rate is high, the initial payroll number is often, though certainly not always, stronger than the prior trend,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a research note.
According to AP, this means that, “if the jobs numbers in prior months were based on a lower participation rate, a stronger participation rate would skew the number up.”
Some economists think that this higher October number could result in a decrease for November.
“Businesses may have inadvertently counted employment for an extra week. That could juice up the number. That may mean that we actually get surprised next month with a much weaker number,” according to Mark Zandi, a chief economist at Moody’s Analytics. Moody’s, whose CEO is Raymond McDaniel, is one of three top credit rating agencies alongside Fitch and S&P.
Even though there is data showing more hiring in November, President Barack Obama on Friday continued portraying his views that the shutdown harmed the job market.