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How the shutdown could affect the January jobs report

Regardless of how well the American economy is doing, the January jobs report might be ugly.If the go...

Posted: Jan 11, 2019 4:39 AM
Updated: Jan 11, 2019 4:39 AM

Regardless of how well the American economy is doing, the January jobs report might be ugly.

If the government shutdown lasts through next week, nearly half of the 800,000 workers who have been furloughed will be counted as unemployed. The US Bureau of Labor Statistics bases its report on a survey of workers taken during the pay period that contains the 12th of each month. That's this Saturday, and many pay periods end on the 19th.

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The employees who are working without pay will be counted as employed. But if the remaining furloughed workers end up being counted as unemployed, January could be the first month that jobs declined since September 2010.

And the decline could be comparatively large. The biggest seasonally adjusted, month-over-month loss during the Great Recession was in March 2009, when 802,000 jobs were wiped out. The largest monthly job loss on record, 1.97 million, was in September 1945 as America's wartime economy came to a halt.

The last prolonged government shutdown, in 2013, didn't discernibly affect the headline jobs number because most workers received wages for some part of the pay period that included the 12th of the month. It did, however, contribute to a rise in the number of people counted as unemployed and an uptick in the unemployment rate.

A January swoon, following December's report that employers added 312,000 jobs, probably wouldn't have a big impact on the market because traders would see it coming. The number would also presumably bounce back when the shutdown ends.

But it sure won't look good. The White House has already begun working to counter bad public perception.

"And so what we'll say, if we were to see that negative number: 'Well sure, it was negative, but if you adjust for the furlough, it looks like another plus-200 month or something like that,'" Council of Economic Advisers chairman Kevin Hassett told reporters last week at the White House.

The January jobs report, due out on February 1, may also reflect an expected decline in employment among federal contractors and workers in ancillary jobs — think people who work in sandwich shops or in daycare centers — that depend on federal employees going to the office.

In 2013, the Council of Economic Advisers estimated that the combination of a shutdown and uncertainty created by arguing over whether to raise the debt limit led to the creation of 120,000 fewer private-sector jobs over two weeks.

The overall economy is not expected to take a big hit from the shutdown, because workers are expected to be paid after the fact, when the government reopens. Congress will have to pass a law to make that happen, and President Donald Trump will have to sign it.

Correction: An earlier version of this article incorrectly reported the number of federal workers who could be counted as unemployed.

Oregon Coronavirus Cases

Data is updated nightly.

Cases: 387485

Reported Deaths: 5116
CountyCasesDeaths
Multnomah59768836
Washington41571393
Marion39592504
Clackamas32426376
Lane29856354
Jackson24672350
Deschutes23182185
Umatilla15087180
Linn14488178
Douglas13236286
Josephine10057240
Yamhill9665142
Klamath8979145
Polk813698
Benton605137
Malheur591586
Coos5573106
Columbia423855
Jefferson416865
Lincoln357252
Union336854
Crook330156
Wasco314846
Clatsop258335
Baker217531
Tillamook214345
Hood River211337
Morrow197025
Curry190136
Harney119332
Grant108314
Lake104016
Wallowa74713
Sherman1903
Gilliam1844
Wheeler1141
Unassigned00

California Coronavirus Cases

Data is updated nightly.

Cases: 5061240

Reported Deaths: 74159
CountyCasesDeaths
Los Angeles152548627128
San Diego4047084319
Riverside3849455306
San Bernardino3718825944
Orange3329505675
Sacramento1674002423
Kern1565171781
Fresno1558992246
Santa Clara1511691922
Alameda1246581504
San Joaquin1070001833
Ventura1036461188
Contra Costa1032921045
Stanislaus912991413
Tulare856141082
San Francisco56614669
San Mateo56058629
Monterey52340625
Solano47422356
Santa Barbara47035548
Merced44807664
Sonoma42912412
Placer41881468
Imperial38128769
Kings35038358
San Luis Obispo31294358
Madera26005311
Shasta25917440
Butte25295309
Santa Cruz22028222
Yolo21451257
Marin18342248
El Dorado18166161
Sutter14494181
Napa13372104
Yuba1070088
Tehama10230129
Humboldt10043117
Nevada9914103
Mendocino848894
Lassen792355
San Benito775977
Tuolumne767790
Lake6990110
Amador573766
Siskiyou470954
Glenn455136
Calaveras435685
Del Norte371242
Colusa323519
Inyo254345
Plumas19127
Mono18294
Mariposa156718
Trinity98817
Modoc7475
Unassigned2430
Sierra2170
Alpine1060
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