U.S. UNEMPLOYMENT RATE RISES TO 7.3 PERCENT; 204,000 JOBS ADDED
c.2013 New York Times News Service
The U.S. government shutdown was barely evident in the October jobs report Friday, as private employers added positions at an unexpectedly robust pace.
Employers added 204,000 workers to their payrolls, the Labor Department reported, while the jobless rate rose to 7.3 percent from 7.2 percent in September, reflecting the impact of temporarily furloughed federal workers.
The report, which was delayed by a week because of the shutdown, was especially tricky to predict simply because economists did not know how much of a swing the shutdown would cause.
Indeed, there was a wide range of estimates from economists ahead of the report. The consensus, according to Bloomberg News, called for an increase in the unemployment rate to 7.3 percent, with payrolls growing by 120,000.
But those forecasts varied greatly, with economists calling for anywhere from 50,000 to 175,000 new jobs and an unemployment rate of 7.2 percent to 7.6 percent.
“It will be difficult to tell how much is from the shutdown and how much is the underlying trend,” Dean Maki, chief U.S. economist at Barclays, said in an interview before the announcement. “There won’t be a clean way to do it.”
The Labor Department’s data is based on two separate surveys, one of households to find the unemployment rate, another of public-sector employers and private companies to determine how many jobs the economy created.
For the purposes of the October report, Labor Department statisticians counted furloughed workers as unemployed for the household survey but working for the employer survey.
That helps explain why the growth of new jobs was so healthy but the unemployment rate climbed.
Both figures were being watched closely by policy makers at the Federal Reserve as they try to figure out when to ease back on efforts to stimulate the economy.
The Fed’s $85 billion in monthly purchases of Treasury securities and mortgage-backed bonds had been expected to gradually fall beginning in September.
But the Fed and its chairman, Ben S. Bernanke, surprised Wall Street in September and decided to hold off on the so-called tapering amid mixed signals on the economy and figures for job creation that were weaker than they had hoped.
Most economists now expect the central bank to wait until next year to taper, although the Fed could still move at its December meeting.
Unemployment data for November will also be skewed by the fallout from the shutdown, with formerly furloughed workers now back on the job.
Economists say a more reliable picture of the labor market won’t be available until early January, when the government releases jobs data for December.