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Economists expect ‘messier’ jobs report for October after unimpressive September

October 22, 2013 at 12:00 AM EST
Employment data for the month of September was finally released after being delayed for weeks by the shutdown. The numbers reflect a month of disappointing growth with little change in unemployment and fewer jobs created than expected. Economic correspondent Paul Solman looks at what it means for the nation's economic recovery.
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JUDY WOODRUFF: Let’s turn back to the jobs picture and new information suggesting hiring could be slowing down.

NewsHour economics correspondent Paul Solman looks at the latest labor report, part of his ongoing reporting Making sense of financial news.

MAN: It is jobs Tuesday; 148,000 does miss estimates, but the rate drops to 7.2.

PAUL SOLMAN: Fewer jobs than hoped for, an employment rate that changed little, as the Bureau of Labor Statistics put it — in short, this morning’s job numbers reflect another month of anemic growth.

Like most of its fellow economists, it seems, Harvard’s Richard Freeman was unimpressed.

RICHARD FREEMAN, Harvard University: It’s typical of the numbers we have been seeing over the last couple years, small improvement in jobs, not enough to bring us back to a strong economy, and the government sector keeps slightly declining, now, not as much as it was, private sector balancing that out with growth. But we’re still in a very weak labor market.

PAUL SOLMAN: Unsurprisingly, Jason Furman, the president’s chief economist, sounded a more upbeat note.

JASON FURMAN, White House Council of Economic Advisers: We have had 43 straight months of job growth. That unemployment rate has come down steadily. We just can’t be satisfied with where it is.

PAUL SOLMAN: The problem is, the three-month average of 143,000 new jobs since July is well below the 182,000 average of the prior three months.

And economist Freeman sees troubling trends behind the headlines, the 21 percent teen unemployment rate, for instance.

RICHARD FREEMAN: The unemployment rate is higher than it has been for a long, long time, remains high. The employment rate remains low, and it looks as if, among 16-to-19-year-olds, they have lost about 10 percentage points of jobs. There’s Just no evidence that we’re going recovery to where we were before the Wall Street implosion and ensuing recession.

PAUL SOLMAN: Nor is there evidence that those without jobs are getting them any more quickly. The average length of unemployment remained at 37 weeks.

RICHARD FREEMAN: And that’s the longest we have ever had in a recovery, by far.

PAUL SOLMAN: Of course, the September report was stalled by more than half-a-month by government furloughs. So, we asked, what effect, if any, did the shutdown have on this month’s numbers?

RICHARD FREEMAN: Well, it didn’t affect the numbers. The numbers were gathered before the shutdown. And so we would look to next month’s numbers and the following month’s numbers for a weaker economy. But the statistics won’t be quite as good as they would be normally, because, of course, the shutdown affected the statistical agencies gathering the numbers. And so we’re going to have messier numbers for the next several months.

PAUL SOLMAN: Messier numbers and worse ones, said the White House’s Jason Furman, predicting 120,000 fewer jobs in the next report due to the shutdown.

JASON FURMAN: What we did in October was a self-inflicted wound that will subtract from jobs when we eventually learn the job numbers for October.

PAUL SOLMAN: And will that influence the Federal Reserve’s decision to continue or to taper off its so-called quantitative easing, its way of increasing the quantity of money, thereby making it easier to come by?

How will the Federal Reserve, do you think, respond to this month’s numbers and next month’s?

RICHARD FREEMAN: It’s likely to stick to current policies, because a change was based — would be based on believing the economy got to be more healthy. And I — it’s very dubious that we will see that in the October and November data.

PAUL SOLMAN: And no change means continuing to buy bonds with money that the Fed creates to stimulate the economy.

RICHARD FREEMAN: Yes. I mean, the last thing they would want to do is, if the shutdown gave — gives the economy a negative kick, which it almost surely did, and then change their policies and then push us into another recession.

PAUL SOLMAN: And so we slog ahead while awaiting next month’s job numbers, which, courtesy of the shutdown, will also be delayed by one week and are likely to be even less rousing than September’s.