How did the shutdown affect the January jobs report?

Andrew Cummings
February 3, 2019

While the Dow Jones estimate was for only 170,000 new jobs in January's nonfarm payrolls, there was a net downward revision of 70,000 payrolls when looking at the combined revisions for December and November.

The U.S. has been experiencing the longest streak of job gains on record.

The unemployment rate inched up to 4 percent, and the shutdown contributed to the uptick, the department said.

Don't see the graphic above? The Federal Reserve said this week that it would hold off on interest rate hikes for at least the next several months, giving Wall Street the best of both worlds: Good economic news, and less fear that it will lead to the Fed tightening the money supply.

The December report also had a low initial response rate and its data was revised down sizably today to 222,000 from 312,000.

The healthy gain the government reported Friday illustrated the job market's resilience almost a decade into the economic expansion.

"Best January for the DOW in over 30 years", Trump said in a February 1 tweet, commenting on the solid growth of the Dow Jones Industrial Average index since the market's December 24 low.

The government added 8,000 jobs last month. The Bureau of Labor Statistics announced that the initial response rate for the Establishment Survey was just 61%, the lowest since 2008.

Another possible ripple effect from the shutdown: The number of people working part time for economic reasons jumped by about 500,000, after many months of declining.

The partial government shutdown caused 800,000 workers to miss two paychecks.

Most economists have forecast that the shutdown will likely slow economic growth for the first three months of this year.

The Federal Reserve, which keeps a close eye on the employment numbers, said Wednesday that the labor market has continued to strengthen since December. The central bank, which raised rates four times a year ago, did not raise rates and cited "global economic and financial developments" and low US inflation as reasons to be patient before changing rates again. While the Labor Department, which is tasked to release the jobs report, remained open, the Commerce Department - responsible for a great amount of data counted on by forecasters - was closed.

The construction, healthcare, hospitality and retail sectors added tens of thousands workers, another sign that the robust labour market remains a fundamental source of strength even though the United States economy is expected to slow this year.

MARTIN: What do these numbers show? And a lot of the hiring was in restaurants and hotels, construction and health care.

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