With the government shut down, the Bureau of Labor Statistics did not publish their monthly jobs report today. That’s the first time that’s happened since January 2019. Consequently, economist are relying on the ADP National Employment Report published on Wednesday (turns out that the rest of the world still turn even though the federal government is not operational). ADP calculated that a net -3,000 jobs were lost last month, versus the expected rebound of +52,000 new jobs. However, the actual Report showed that -32,000 additional jobs were lost last month.
As I mentioned a few weeks ago, ADP has been pretty reliable for the last few years. Remember that the ADP report only tracks the private sector and not government jobs. Because the cause of the shutdown is the overspending of federal funds, many government jobs may be adversely impacted by the resolution to reduce spending. If ADP is accurate and there is no marked correction upward in November, the Unemployment Rate will probably be ticking up another 0.1% to 4.4% even without federal job losses. Historically. 4.4% is still really low, but the upward trend is concerning for the U.S. labor market in the near term.
Lest my viewpoint be skewed by the above image and my political neutrality, let me say one more thing if I may. I know that a lot of federal employees are continuing to work at least 40 hours a week right now knowing that they might not be getting paid for a while. So you madam and you sir, have my respect and admiration. I’m still getting my mail, the FAA is continuing to keep our skies safe and airlines operational, and soldiers in every branch of the military continue to keep our land safe and secure. So God bless the USA!
Conventional loan rates have risen a little bit this week, but interestingly enough with the government shut down, the interest rates on government loans have actually dropped marginally.
