U.S. October NFP expected to have risen by only 125,000 jobs due to shutdown
(Reuters) – U.S. job growth likely slowed sharply in October with the unemployment rate ticking higher as a partial shutdown of the government kept workers at home, undercutting an already lethargic labor market.
Non-farm payrolls are expected to have risen by only 125,000 jobs last month, according to a Reuters survey of economists, down from an increase of 148,000 in September.
That would be well below the 178,000 jobs monthly average over the first nine months of the year. The unemployment rate is forecast to edge up to 7.3 percent from September’s nearly five-year low of 7.2 percent.
Economists estimate the 16-day federal shutdown reduced payrolls by as much as 50,000 jobs last month, and they expect them to bounce back in coming months. Even so, it would only suggest the labor market remains on its gradual recovery course.
The government closure started on October 1 and lasted through the survey periods for both the payrolls data and the unemployment rate.
The Labor Department will release the closely watched report on Friday at 8:30 a.m. EST, a week later than originally scheduled because the shutdown delayed the gathering of data.
“It’s going to be difficult to interpret what happened in the labor market in October. I wouldn’t put too much weight on the employment report one way or another,” said Gus Faucher, senior economist at PNC Financial Services Group in Pittsburgh.
Private payrolls are seen bearing the brunt of the fallout, with little hit expected to government employment as the hundreds of thousands of federal workers furloughed received retroactive pay.
The survey of employers from which payrolls are constructed counts people as employed if they received pay for any part of the pay period that includes the 12th day of the month.
Available evidence from claims for jobless benefits and a private-sector employment tally from payroll processor ADP suggests government contractors and other workers whose jobs depend on federal government funding were sent home without pay.