-Job Growth Comeback!-

Article: What Shutdown? Job Growth Strong in October

Author: Annalyn Kurtz

Date of article: November 8, 2013

Website: CNN Money

                Everyone predicted the economy to fall drastically after the 16 days of little government interaction due to the shutdown but surprisingly the economy was not hit that hard with the freeze, in fact, it increased activity. According to the Bureau of Labor Statistics, 204000 new jobs were added to the U.S. economy in the month of October. This number was surprising to economists’ expectation for the month. This number is a huge leap from the late August and September hiring stat of 60,000.

The article puts it bluntly: “Economists were expecting weak job growth due to uncertainties created by the budget battles in Washington. The federal government shut down on Oct. 1, after Congress failed to agree on a budget for fiscal 2014. The standoff lasted 16 days and left as many as 800,000 federal employees temporarily out of work.” The numbers were also strong enough to get Wall Street talking once again about when the Federal Reserve should start slowing its stimulus program. The Fed has been buying $85 billion in bonds each month since September 2012, in an effort to strengthen the job market.

Given the government shutdown, many Fed watchers were starting to think the central bank would continue its stimulus at full blast until at least spring 2014. The Fed next meets at the end of December, and the strong jobs report could mean officials will consider reducing their monthly bond purchases sooner rather than later. "Once again the U.S. economy appears to be overcoming a summer swoon," said Paul Ashworth, chief U.S. economist for Capital Economics in a research note. "In our opinion, the data would justify the Fed reducing the pace of its asset purchases in December."

The outlook isn't all rosy though. Overall, the economy has still not recovered all of the jobs lost in the Great Recession. The jobs report also showed the unemployment rate rose slightly to 7.3%, up from 7.2% in September, but economists expect this to be a passing blip. About 448,000 furloughed federal workers were counted as being on temporary layoff, and the next jobs report, due on December 6, will probably show these people were back at work in November.

Meanwhile, only 62.8% of Americans over age 16 either had a job or looked for one. That's the lowest level since March 1978. Economists also believe this number was impacted by furloughed federal employees but nevertheless, it has been hovering around the lowest levels since the 1970s for months. Where are the jobs? Job gains came across a variety of sectors. Retailers added 44,000 jobs, professional and business services also added 44,000 jobs, restaurants and bars hired 29,000 workers and manufacturers added 12,000 jobs. Meanwhile, the federal government cut 12,000 jobs -- a third of which were at the U.S. Postal Service.