Today’s job numbers, released by the Bureau of Labor Statistics (BLS), show that 204,000 jobs were added in October, leaving the unemployment rate slightly higher at 7.3 percent, while also detracting from the claim that the recent government shutdown would have disastrous effects on the economy.
As the shutdown began to materialize in October, lawmakers and pundits alike turned into analogues of Chicken Little, warning that the shutdown of a tiny fraction of government services would mean certain doom for the just-barely-getting-by economy. Economists and administration officials had expected that there would be only a little more than 100,000 jobs created. The addition of 204,000 jobs to nonfarm payrolls was surprising.
Particularly troubling is a decrease in the labor force participation rate by almost half of a percentage point, to 62.8 percent. This means that nearly 40 percent of the American labor force has given up looking for work. Politico cites analysts as saying that is due to temporarily unemployed federal workers from the shutdown, but it’s unclear as to how furloughed workers could substantially contribute to this number. An analyst at CNBC, Kathy Bostjanic, indicates that, “The negative impact from the partial government shutdown on the nonfarm payroll employment count doesn’t seem to have affected the private sector at all.” All job growth in October occurred in the private sector, according to the BLS numbers.
CNBC believes the jobs numbers might spur a new round of betting on whether the Fed will taper due to marginal improvement in economic statistics, but with Janet Yellen inbound and based on the trend so far, that’s unlikely. “Oddly enough, those on Wall Street will be disappointed as tapering talk will again resurface, thus squashing any idea of a would-be Gatsby rally today,” quotes CNBC of Todd Schoenberger from LandColt Capital. It appears as if markets have become more interested not in signs of growth or an uptick, but rather in whether these signs of growth will force the Fed to wean the economy off of quantitative-easing.