Source: Bureau of Labor Statistics
The unemployment rate ticked down to 7.2 percent from 7.3 percent the previous month.
Federal Reserve officials and economists are closely watching the report for any signs of weakness. But the numbers may not offer the most current picture of the economy.
The numbers were supposed to be released two and a half weeks ago — the jobs report usually comes out the first Friday of each month — but were delayed by the government shutdown that began Oct. 1. The 16-day shutdown and concurrent Congressional battle over the debt ceiling probably worsened employment in the weeks since the September jobs data were collected, both because hundreds of thousands of federal workers and contractors were furloughed and also because anxiety and uncertainty over the budget battle caused consumer confidence to plummet.
Economists are hopeful that any dip will be temporary. If not, that could effectively delay when the Federal Reserve decides to start tapering its major monetary stimulus program, known as quantitative easing, since that action has been predicated on a steadily improving economy.
Some workers are still feeling the effects of the shutdown, though it officially ended last week.
“Workers like me, we were already living day to day and paycheck to paycheck,” said Luis Chiliquinga, 63, who earns $8.35 an hour at a McDonald’s inside the National Air and Space Museum in Washington. Because the museum was closed during the shutdown, the McDonald’s was too.
As a result of Mr. Chiliquinga’s temporary layoff, he could not pay his rent on time and was slapped with a $62 late fee. His boss told him McDonald’s would pay workers for any hours they were previously scheduled to work that got canceled due to the shutdown, but as yet he has not received any of this promised back-pay. To make matters worse, after the museum reopened, his hours mysteriously disappeared from the posted schedule, and he still doesn’t have clarity about whether he will regain the hours he had previously been working.
“All this money I had to spend for travel and paperwork, to figure out what’s going on with my job, all that money wasn’t budgeted,” he said. “Neither was the lost wages. Of course this is going to have a long-lasting effect on myself and my family.”
Even though the latest jobs report numbers are a bit more dated than usual, the report is still being closely scrutinized by the Federal Reserve..
Over the summer Federal Reserve Chairman Ben S. Bernanke had said that the central bank would likely begin scaling back its large-scale asset purchases “later this year” if the economy improved as much as Fed staffers then forecast it would, a statement that on Wall Street was widely interpreted to mean September. When the Fed officials surprised Wall Street by not electing to temper the ongoing stimulus measures at its September meeting, however, analysts then started to believe that “later this year” must refer to one of the Fed’s two remaining scheduled meetings for 2013, on Oct. 29-30 and Dec. 17-18. Tuesday’s jobs report and the remaining reports this year will factor into the Fed’s taper timing.
While many economists now believe the slowing of monetary stimulus will happen in December, they also acknowledge that the shutdown has muddied the data Fed officials use make that timing decision, which may end up delaying the Fed’s plans.
“The Fed’s core criteria to change policy is clear evidence of a sustained improvement in the labor market outlook,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a note to clients. “Such evidence will not be available this year” because the shutdown depressed employment in October and then likely caused a corresponding bounce back in November.
The next “clean” report — that is, a jobs snapshot not affected by the whiplash of a federal government shutdown and reopening – won’t come until January 2014, when hiring data for December will be released. As a result, Mr. Shepherdson predicted, this data disruption will force the Federal Reserve to hold off any reduction in its stimulus efforts till next year.
By that time Janet L. Yellen, the president’s pick to succeed Mr. Bernanke when his chairmanship ends on Jan. 31, may be at the head of the central bank. She is widely expected to continue the policies set in place by Mr. Bernanke.
As with the September jobs report release, the Labor Department’s snapshot of the October job market will also be delayed by a week — now coming out Nov. 8, rather than the previously scheduled Nov. 1 — as a result of the government shutdown.
Nelson D. Schwartz contributed reporting.
The unemployment rate ticked down to 7.2 percent from 7.3 percent the previous month.
Federal Reserve officials and economists are closely watching the report for any signs of weakness. But the numbers may not offer the most current picture of the economy.
The numbers were supposed to be released two and a half weeks ago — the jobs report usually comes out the first Friday of each month — but were delayed by the government shutdown that began Oct. 1. The 16-day shutdown and concurrent Congressional battle over the debt ceiling probably worsened employment in the weeks since the September jobs data were collected, both because hundreds of thousands of federal workers and contractors were furloughed and also because anxiety and uncertainty over the budget battle caused consumer confidence to plummet.
Economists are hopeful that any dip will be temporary. If not, that could effectively delay when the Federal Reserve decides to start tapering its major monetary stimulus program, known as quantitative easing, since that action has been predicated on a steadily improving economy.
Some workers are still feeling the effects of the shutdown, though it officially ended last week.
“Workers like me, we were already living day to day and paycheck to paycheck,” said Luis Chiliquinga, 63, who earns $8.35 an hour at a McDonald’s inside the National Air and Space Museum in Washington. Because the museum was closed during the shutdown, the McDonald’s was too.
As a result of Mr. Chiliquinga’s temporary layoff, he could not pay his rent on time and was slapped with a $62 late fee. His boss told him McDonald’s would pay workers for any hours they were previously scheduled to work that got canceled due to the shutdown, but as yet he has not received any of this promised back-pay. To make matters worse, after the museum reopened, his hours mysteriously disappeared from the posted schedule, and he still doesn’t have clarity about whether he will regain the hours he had previously been working.
“All this money I had to spend for travel and paperwork, to figure out what’s going on with my job, all that money wasn’t budgeted,” he said. “Neither was the lost wages. Of course this is going to have a long-lasting effect on myself and my family.”
Even though the latest jobs report numbers are a bit more dated than usual, the report is still being closely scrutinized by the Federal Reserve..
Over the summer Federal Reserve Chairman Ben S. Bernanke had said that the central bank would likely begin scaling back its large-scale asset purchases “later this year” if the economy improved as much as Fed staffers then forecast it would, a statement that on Wall Street was widely interpreted to mean September. When the Fed officials surprised Wall Street by not electing to temper the ongoing stimulus measures at its September meeting, however, analysts then started to believe that “later this year” must refer to one of the Fed’s two remaining scheduled meetings for 2013, on Oct. 29-30 and Dec. 17-18. Tuesday’s jobs report and the remaining reports this year will factor into the Fed’s taper timing.
While many economists now believe the slowing of monetary stimulus will happen in December, they also acknowledge that the shutdown has muddied the data Fed officials use make that timing decision, which may end up delaying the Fed’s plans.
“The Fed’s core criteria to change policy is clear evidence of a sustained improvement in the labor market outlook,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a note to clients. “Such evidence will not be available this year” because the shutdown depressed employment in October and then likely caused a corresponding bounce back in November.
The next “clean” report — that is, a jobs snapshot not affected by the whiplash of a federal government shutdown and reopening – won’t come until January 2014, when hiring data for December will be released. As a result, Mr. Shepherdson predicted, this data disruption will force the Federal Reserve to hold off any reduction in its stimulus efforts till next year.
By that time Janet L. Yellen, the president’s pick to succeed Mr. Bernanke when his chairmanship ends on Jan. 31, may be at the head of the central bank. She is widely expected to continue the policies set in place by Mr. Bernanke.
As with the September jobs report release, the Labor Department’s snapshot of the October job market will also be delayed by a week — now coming out Nov. 8, rather than the previously scheduled Nov. 1 — as a result of the government shutdown.
Nelson D. Schwartz contributed reporting.