Jobs and the Debt-Ceiling Debate: The Ticker
Did politicians' brinksmanship during this summer's debt-ceiling debate have a negative impact on the economy? Today's jobs report offers some data points consistent with that narrative.
Consider manufacturing, an industry highly sensitive to confidence, because managers must make hiring decisions based on their sense of what demand will be weeks or months down the road. Employment in the sector fell by 3,000, the first monthly decline since October 2010. Fabricated metal products, close to the beginning of the supply chain, shed more than 5,000 jobs.
Retailers, too, must think ahead when hiring people to staff stores and warehouses. They cut employment by an estimated 7,800 in August, the largest decline since November 2010.
To be sure, it can be difficult to untangle all the things executives had to worry about in early August, not least among them a sharp drop in stock prices and renewed stress in the financial system.
Also, one shouldn't read too much into a single month's jobs report. The confidence interval on the August payroll number, for example, was plus or minus 96,400, meaning the Labor Department is 90 percent sure the change in nonfarm payrolls was somewhere between a loss of 96,400 jobs and a gain of 96,400 jobs. The manufacturing number was somewhere between a 23,900 loss and a 17,900 gain, and the retail number somewhere between minus 33,900 and plus 18,300.
Still, combined with the sharp drop in consumer confidence in August, the available economic data suggest political theater can have real consequences.
(Mark Whitehouse is a member of the Bloomberg View editorial board.)