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Policy: Economy

The week ahead in economics: The jobs report and fallout from the government shutdown

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Jobs,Banking and Finance Committee,Labor,PennAve,Joseph Lawler,Economy,Federal Reserve,Janet Yellen,Government Shutdown

The government shutdown and debt limit fight is in the past, in terms of politics.

For the U.S. economy, however, the fallout is yet to be quantified.

On Friday, the federal government will release its delayed October jobs report, the biggest early indicator report yet on how much the government shutdown affected the economy.

The report was initially scheduled for Nov. 1, but because of the shutdown, the Bureau of Labor Statistics was not able to release it in time.

The September jobs report, which showed an increase of only 148,000 new jobs, suggested that employment growth was slowing even before the shutdown began.

Analysts expect October’s number to be even worse. The consensus estimate is for 120,000 new non-farm payroll jobs, according to Bloomberg, but the range is anywhere from -300,000 to 168,000 new jobs.

Private-sector economists have said that the government shutdown and hit to consumer and investor confidence caused by October's fiscal showdowns slowed growth by between 0.2 and 0.6 in the quarter on an annualized basis. The Obama administration, using its own methodology, pegged the damage at 120,000 jobs through the first two weeks of the month.

Last week, however, there were signs that the private sector might have weathered the shutdown better than expected. Manufacturing reports showed greater-than-expected strength, with friday's manufacturing index published by the Institute for Supply Management at a level higher than it had been since 2011.

The economy has survived shutdowns and debt limit standoffs relatively unharmed in the past, and it's possible that the statistics in the months ahead will show limited damage from the latest episode.

Other reports that could shed light on the health of the economy through October include the ISM non-manufacturing index on Tuesday and the Job Openings and Labor Turnover Survey from the Labor Department on Friday.

The Senate Banking Committee will continue working on issues related to housing reform this week, with hearings scheduled for Tuesday and Thursday mornings on small lenders and affordable housing.

On Friday morning, Fed Chairman Ben Bernanke will speak publicly for the first time since Janet Yellen was chosen to succeed him. Bernanke will appear at an International Monetary Fund event in Washington. Yellen, meanwhile, will continue meeting privately with senators on the banking committee ahead of her first public hearing before the panel, which is likely to be on Nov. 14.

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Author:

Joseph Lawler

Economics Writer
The Washington Examiner