Furloughed Staff to Increase U.S. Jobless Count, Labor Says
Federal workers furloughed during the 16-day partial government shutdown will be counted as unemployed when the U.S. October jobs report is issued on Nov. 8, the Labor Department said today.
Employees out of work during the week spanning Oct. 6 to Oct. 12 will be reflected in the jobless tally even if they received, or anticipated getting, back pay, the Labor Department said in a statement on its website outlining how the shutdown affected data collection.
About 800,000 federal employees were temporarily dismissed from their jobs on Oct. 1 as lawmakers wrangled over how to avert a U.S. default. The Pentagon recalled about 315,000 the following week, leaving just under 500,000 still jobless during the Labor Department’s survey week.
The unemployment rate is derived from a survey of households covering the week that includes the 12th of the month, which was during the partial shutdown.
Rather than using the exact count of the number of government workers on furlough that week, the Labor Department will instead rely on its survey to arrive at a tally, Mary Bowler, an economist for the Bureau of Labor Statistics, said today in an interview. The responses in the survey of about 60,000 households are extrapolated nationally using weights based on demographics, said Bowler.
That implies the number of unemployed will go up by less than 500,000 if federal-worker households are under-represented in the survey, or by more if they make up a larger share. In either case, the shutdown will probably tend to make the jobless rate higher than it would ordinarily be.
“The estimate will be what it will be, but we are not going to control it to some overall federal number,” said Bowler. “Presumably we’ll catch some federal workers in the sample,” she said.
The household survey component of the jobs report reflects respondents’ employment situations from Oct. 6 through Oct. 12, when some federal agencies and contractors didn’t report to work due to lack of funding. That reference period was unchanged, even as the surveys were delayed to Oct. 20 from Oct. 13.
The unemployment rate at 7.2 percent is projected to rise to 7.3 percent in the October report, according to a preliminary median estimate in a Bloomberg survey of economists.
“It’s very unclear how many of the hundreds of thousands of federal government workers who were furloughed that week will in fact show up as unemployed,” said Ryan Wang, an economist at HSBC Securities USA Inc. in New York.
Full-time workers who put in fewer than 35 hours during the survey week will be counted as working part-time for economic reasons, the Labor Department also said.
The separate survey of employers will be less affected, according to the Labor Department’s statement. That poll is for the pay period that includes the 12th of the month, and anyone receiving pay for any part of the period will be counted as part of the payroll tally, the agency said.
The economy probably added 125,000 jobs this month, down from 148,000 in September, according to a Bloomberg survey of economists.
The payroll data will be a better barometer of how much the partial shutdown affected the economy said Wang.
“This is not going to be a number that’s just thrown out,” Wang said. “It’ll be watched as a measure of how large that disruption was.”
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